HAYWARD, CA -- 08/10/2006 -- Aradigm Corporation (NASDAQ: ARDM) today announced financial results for the second quarter and six months ended June 30, 2006.
The company reported revenues for the three months ended June 30, 2006 of $1.8 million compared to $1.2 million for the same period in 2005. Revenues for the six months ended June 30, 2006 were $2.9 million compared with $8.9 million for the same period in 2005. Revenues were derived from currently partnered AERx development programs. Total operating expenses for the three months ended June 30, 2006 were $14.4 million compared to $10.0 million for the same period in 2005. For the six months ended June 30, 2006 total operating expenses were $24 million compared with $20.3 million for the same period in 2005. The operating expenses for the three and six months included $1.4 million for the costs associated with the corporate restructuring announced in May.
The company reported a net loss for the three months ended June 30, 2006 of $12.4 million, or $0.85 per share, compared with a net loss of $8.5 million, or $0.58 per share, for the same period in 2005. The net loss for the six months ended June 30, 2006 was $20.7 million, or $1.42 per share, compared with a net loss of $10.8 million, or $0.75 per share, for the same period in 2005. This included an asset impairment of approximately $4 million taken during this quarter to reflect the structure of an anticipated Intraject transaction.
As of June 30, 2006, cash, cash equivalents and short-term investments totaled approximately $8.9 million. It should be noted that this cash on hand does not include the recent transaction with Novo Nordisk, which was executed following the close of the second quarter and resulted in $27.5 million in cash to Aradigm.
Recent Highlights
- -- In a press release issued this afternoon, the Company announced the
appointment of Igor Gonda, Ph.D. as its President and Chief Executive
Officer effective immediately. Dr. Gonda brings more than 30 years of
pharmaceutical drug product development experience, with specific focus
within the respiratory area and is currently both a member of Aradigm's
Board of Directors and Chairman of its Scientific Advisory Board. Most
recently, Dr. Gonda was Managing Director and Chief Executive Officer of
Acrux Limited, a specialty pharmaceutical company based in Melbourne,
Australia. Prior to joining Acrux in 2001, Dr. Gonda served as Aradigm's
Chief Scientific Officer. His appointment comes as Aradigm is refocusing
its business on the pulmonary segment of the pharmaceutical marketplace.
- -- In July 2006, the Company announced the further execution of the
strategic partnership with Novo Nordisk. The agreement, which resulted in a
non-dilutive cash infusion to Aradigm of $27.5 million, is comprised of an
intellectual property assignment, a royalty prepayment and an eight-year
promissory note. The promissory note is secured by the royalty payments on
the AERx Diabetes Management System (iDMS), which is sold under the Aradigm
license.
- -- During the quarter the Company completed the corporate restructuring
announced in May. Today Aradigm has 65 employees dedicated to advancing
the company's pulmonary product pipeline. For the quarter, the total costs
associated with the restructuring were $1.4 million.
- -- This week Aradigm and its partner APT Pharmaceuticals completed the
dosing of patients enrolled in its AERX HCQ Phase 2 clinical program for
the treatment of asthma. The program is now entering the data analysis
stage with results expected by the end of the year.
"During the second quarter the Company executed on a corporate restructuring that allowed Aradigm to focus on its core competencies of pulmonary delivery and respiratory diseases," said Dr. Bryan Lawlis, Aradigm's outgoing President and Chief Executive Officer. "The restructuring, combined with the funding tied to the recent agreement with Novo Nordisk and today's appointment of Dr. Gonda, a respected technology leader in pulmonary delivery, provide Aradigm with the necessary resources to advance its core partnered and self-funded pulmonary programs including our liposomal ciprofloxacin for cystic fibrosis related infections."Dr. Lawlis continued: "Another step in our restructuring process entails a decision regarding our Intraject program. We have recently made progress on a sale of the program and anticipate being able to announce additional details shortly. Under the current agreement structure, Aradigm expects to receive an upfront payment, milestones and royalties upon commercialization. However, with respect to the sale of the assets involved, the Company has recognized an asset impairment of approximately $4 million dollars to reflect the structure of the transaction during this quarter."
Conference Call
The company will host a conference call and question and answer session today at 4:30 pm Eastern Time, 1:30 pm Pacific Time today to discuss these financial results. Dial toll-free 1(877) 788-8790 to access the conference call. International callers dial +1 (706) 679-7281. The event webcast can be found under the investor relations section of the company's website: www.aradigm.com. The webcast and audio replay of the conference call will be available following the call, and can be accessed on www.aradigm.com or by dialing toll-free 1 (800) 642-1687. International callers should dial +1 (706) 645-9291. The replay passcode is 3423978#.
Aradigm combines its non-invasive delivery systems with novel formulations to create products that enable patients to comfortably self-administer biopharmaceuticals and small molecule drugs. Aradigm and its partner, Novo Nordisk, are in Phase 3 clinical trials of the AERx Diabetes Management System for the treatment of Type 1 and Type 2 diabetes. Other current development programs include partnerships and self-initiated programs in treatment or prevention of pulmonary hypertension, respiratory infections, asthma and smoking cessation. More information about Aradigm can be found at www.aradigm.com.
Except for the historical information contained herein, this news release contains forward-looking statements that involve risk and uncertainties, including clinical results, the timely availability and acceptance of new products, the impact of competitive products and pricing, and the management of growth, as well as the other risks detailed from time to time in Aradigm Corporation's Securities and Exchange Commission (SEC) Filings, including the company's Annual Report on Form 10-K, and quarterly reports on Form 10-Q.
AERx and Intraject are registered trademarks of Aradigm.
ARADIGM CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Contract revenues -
From related parties $ 1,710 $ -- $ 50 $ 7,444
Contract revenues -
Other 96 1,212 2,830 1,482
----------- ----------- ----------- -----------
Total Contract revenues 1,807 1,212 2,880 8,926
----------- ----------- ----------- -----------
Operating expenses:
Research and
development 6,357 7,317 13,098 14,387
General and
administrative 2,685 2,713 5,537 5,948
Restructuring and Asset
Impactment 5,370 5,370
----------- ----------- ----------- -----------
Total operating
expenses 14,412 10,030 24,005 20,335
----------- ----------- ----------- -----------
Loss from operations (12,605) (8,818) (21,125) (11,409)
----------- ----------- ----------- -----------
Interest income 135 350 380 638
Interest expense 37 (8) 27 (45)
----------- ----------- ----------- -----------
Net loss $ (12,433) $ (8,476) $ (20,717) $ (10,816)
=========== =========== =========== ===========
Basic and diluted net
loss per share $ (0.85) $ (0.58) $ (1.42) $ (0.75)
Shares used in
computing basic and
diluted net loss per
share ** 14,656 14,572 14,614 14,485
=========== =========== =========== ===========
** All share and per share data reflects a 1 for 5 reverse stock split
effective January 4, 2006 and approved by Aradigm shareholders in
January 2005.
ARADIGM CORPORATION
CONDENSED BALANCE SHEETS
(In thousands)
June 30, December 31,
2006 2005
(Unaudited) *
------------ -------------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 8,914 $ 27,694
Receivables 552 400
Current portion of notes receivable from
officers and employees 20 62
Other current assets 662 874
------------ -------------
Total current assets 10,148 29,030
Property and equipment, net 6,294 9,875
Noncurrent portion of notes receivable from
officers and employees 151 129
Other assets 456 463
------------ -------------
Total assets $ 17,049 $ 39,497
============ =============
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 672 $ 3,034
Accrued clinical and cost of other studies 523 398
Accrued compensation 3,021 3,814
Deferred revenue 217 222
Other accrued liabilities 573 475
------------ -------------
Total current liabilities 5,006 7,943
Noncurrent portion of deferred revenue -- --
Noncurrent portion of deferred rent 824 714
Redeemable convertible preferred stock 23,669 23,669
Shareholders' equity (12,450) 7,171
------------ -------------
Total liabilities, redeemable convertible
preferred stock and shareholders' equity $ 17,049 $ 39,497
============ =============
* The balance sheet at December 31, 2005 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.
Contact: Chris Keenan Aradigm (510) 265-9370