Aradigm Announces Fourth Quarter 2008 and Full Year Financial Results
Hayward, CA – March 25, 2009 – Aradigm Corporation (OTC BB: ARDM.OB)(the “Company”) today announced financial results for the fourth quarter and full year ended December 31, 2008.
The Company recorded no revenue in the fourth quarter, compared with revenue of $18,000 for the fourth quarter of 2007. Total operating expenses for the fourth quarter of 2008 were $5.3 million, compared with total operating expenses of $7.7 million for the fourth quarter 2007. The decrease in operating expenses was due to cost control efforts and the timing of research and development expenses associated with the Company’s lead product candidates, ARD-3100 and ARD-3150 (inhaled liposomal ciprofloxacin for the treatment of cystic fibrosis and bronchiectasis, respectively). The Company’s net loss for the fourth quarter of 2008 was $5.3 million, or $0.10 per share, compared with a net loss of $7.2 million, or $0.13 per share, for the same period in 2007.
Full Year Results
Revenues for the year ended December 31, 2008 were $251,000, compared with revenues of $961,000 in 2007. The decrease in revenue was primarily due to the fact that revenue from milestone and development payments received during the collaboration with United Therapeutics Corporation cannot be recognized under the current revenue recognition rules. Total operating expenses for 2008 were $23.3 million, compared with total operating expenses of $27.4 million in 2007. While research and development expenses reflected a nominal decrease, general and administrative expenses decreased by $1.7 million, and restructuring and lease exit activities decreased by $2.1 million. The decrease in general and administrative expenses was primarily due to cost control efforts. The net loss for the year ended December 31, 2008 was $22.6 million, or $0.42 per share, compared with a net loss of $24.2 million, or $0.48 per share, in 2007.
As of December 31, 2008, cash, cash equivalents and short-term investments totaled $19.4 million, and do not include the proceeds from the February 2009 financing.
Recent Highlights
| • | November 10, 2008: announced the receipt of $2.75 million from Lung Rx, Inc. (“Lung Rx”), a wholly-owned subsidiary of United Therapeutics Corporation, following the completion of a clinical trial of inhaled treprostinil comparing the Company’s AERx Essence® inhaler and the OPTINEB nebulizer, which was used by Lung Rx in its Phase 3 study of inhaled treprostinil. The AERx Essence inhaler is an easy-to-use and maintain palm-size inhaler that is expected to deliver medication to the patient in 2 to 4 breaths, potentially significantly reducing the burden of therapy for pulmonary arterial hypertension patients. |
| • | January 21, 2009: announced positive top-line results from an open-label, four week treatment study of efficacy, safety and tolerability with ARD-3150 once-daily inhaled liposomal ciprofloxacin hydrochloride in patients with non-cystic fibrosis bronchiectasis. This orphan drug condition is a chronic severe respiratory disease and there is currently no drug specifically approved for its treatment in the US. |
| • | February 26, 2009: closed a “registered direct” offering selling approximately 44.7 million shares of common stock at a negotiated purchase price of $0.10 per share for gross proceeds of approximately $4.5 million. The investors in the offering were all current Aradigm shareholders. |
“Last year, we completed two successful Phase 2a studies with our lead product candidate, inhaled liposomal ciprofloxacin, for the treatment of infections associated with cystic fibrosis and bronchiectasis,” said Igor Gonda, Ph.D., the Company’s President and CEO. “In our collaboration with Lung Rx, we completed a clinical trial of inhaled treprostinil in our AERx Essence inhaler and received the first milestone payment of $2 million and development costs. As a result of the intensive cost control efforts and the additional financing from our existing investors in February, we will be able to advance our lead product candidate for infections associated with severe respiratory diseases.”
About Aradigm
Aradigm is an emerging specialty pharmaceutical company focused on the development and commercialization of drugs delivered by inhalation for the treatment of severe respiratory diseases by pulmonologists. Current activities include partnered and self-initiated development programs addressing the treatment of cystic fibrosis, bronchiectasis, pulmonary arterial hypertension, COPD, inhalation anthrax infections and smoking cessation.
Aradigm, AERx, AERx Essence, and the Aradigm Logo are registered trademarks of Aradigm Corporation.
More information about Aradigm can be found at www.aradigm.com.
Forward-Looking Statements
Except for the historical information contained herein, this news release contains forward-looking statements that involve risk and uncertainties, including the advancement of product development and the ability to successfully manage and preserve cash, 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.
Contact:
Investor Relations
Aradigm
(510) 265-8850/9370
Lippert/Heilshorn & Associates
Don Markley or Bruce Voss
(310) 691-7100
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ARADIGM CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three months ended | Twelve months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Revenues | $ | - | $ | 18 | $ | 251 | $ | 961 | ||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 3,607 | 5,623 | 16,499 | 16,770 | ||||||||||||
| General and administrative | 1,690 | 2,029 | 6,679 | 8,401 | ||||||||||||
| Restructuring and lease exit activities | 18 | 25 | 79 | 2,182 | ||||||||||||
| Total operating expenses | 5,315 | 7,677 | 23,257 | 27,353 | ||||||||||||
| Loss from operations | (5,315 | ) | (7,659 | ) | (23,006 | ) | (26,392 | ) | ||||||||
| Interest income | 72 | 553 | 781 | 2,573 | ||||||||||||
| Interest expense | (105 | ) | (100 | ) | (408 | ) | (393 | ) | ||||||||
| Other income (expense), net | 1 | (4 | ) | — | 11 | |||||||||||
| Income tax benefit | 25 | — | 25 | - | ||||||||||||
| Net loss | $ | (5,322 | ) | $ | (7,210 | ) | $ | (22,608 | ) | $ | (24,201 | ) | ||||
| Basic and diluted net loss per common share | $ | (0.10 | ) | $ | (0.13 | ) | $ | (0.42 | ) | $ | (0.48 | ) | ||||
| Shares used in computing basic and diluted net loss per common share | 54,317 | 53,997 | 54,162 | 50,721 | ||||||||||||
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ARADIGM CORPORATION
CONDENSED BALANCE SHEETS
(In thousands)
| December 31, | December 31, | |||||||
| 2008 | 2007 | |||||||
ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 16,741 | $ | 29,964 | ||||
| Short-term investments | 2,399 | 10,546 | ||||||
| Receivables | 393 | 500 | ||||||
| Restricted cash | 225 | 152 | ||||||
| Prepaid and other current assets | 387 | 971 | ||||||
| Total current assets | 20,145 | 42,133 | ||||||
| Property and equipment, net | 5,093 | 3,223 | ||||||
| Notes receivable from officers and employees | 34 | 33 | ||||||
| Restricted cash | — | 153 | ||||||
| Other assets | 247 | 271 | ||||||
| Total assets | $ | 25,519 | $ | 45,813 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 739 | 1,658 | ||||||
| Accrued clinical and cost of other studies | 94 | 789 | ||||||
| Accrued compensation | 1,051 | 1,252 | ||||||
| Deferred revenue | — | 880 | ||||||
| Facility lease exit obligation | 318 | 376 | ||||||
| Other accrued liabilities | 630 | 584 | ||||||
| Total current liabilities | 2,832 | 5,539 | ||||||
| Deferred rent | 199 | 283 | ||||||
| Facility lease exit obligation | 1,056 | 1,373 | ||||||
| Deferred revenue, non-current | 4,122 | — | ||||||
| Other non-current liabilities | 82 | 248 | ||||||
| Note payable and accrued interest to related party | 8,472 | 8,071 | ||||||
| Shareholders’ equity | 8,756 | 30,299 | ||||||
| Total liabilities and shareholders’ equity | $ | 25,519 | $ | 45,813 | ||||
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