Exhibit 99.1 ARADIGM CORPORATION REPORTS FIRST QUARTER 2005 FINANCIAL RESULTS HAYWARD, Calif., April 26 /PRNewswire-FirstCall/ -- Aradigm Corporation (Nasdaq: ARDM) today announced financial results for the first quarter of 2005 ended March 31, 2005. Contract revenues for the quarter ended March 31, 2005 were $7.7 million compared to $6.6 million for the same period in 2004. Of these contract revenues, $5.2 million represents the remaining balance from a milestone payment made by Novo Nordisk prior to the new restructuring agreement. As a result of the restructuring agreement, the associated deferred revenue was recognized. In addition, $2.1 million was recognized for work related to the AERx insulin program during the month of January 2005. Total operating expenses for the quarter ended March 31, 2005 were $10.3 million compared to $14.4 million for the same quarter in 2004. The Company reported a net loss for the first quarter in 2005 of $2.3 million, or $0.03 per share, compared with a net loss of $7.7 million, or $0.12 per share, for the same period in 2004. As of March 31, 2005, cash, cash equivalents and short-term investments totaled approximately $53.7 million. "The closing of the restructuring of our development program with Novo Nordisk during the quarter signaled a new beginning for Aradigm," said V. Bryan Lawlis, President and Chief Executive Officer of Aradigm. "Now with strong financial resources, dedicated technical personnel, clear manufacturing strategies in place, and partnered as well as identified self-initiated programs progressing, we remain confident in achieving our near-term objectives, including the commercial launch of our first product in 2007." Continued Dr. Lawlis: "We also are encouraged with the advancement of two of our early stage-partnered programs. This progress comes following initial positive data, all clinical endpoints being met and incremental evaluations agreed to by all parties." Recent Highlights -- In January, the company successfully closed the restructuring of its AERx insulin development program with Novo Nordisk. Terms of the restructuring have previously been disclosed with Aradigm receiving approximately $55 million. Going forward, Aradigm and Novo Nordisk will continue to work together on the development of future delivery systems, with Aradigm maintaining a long-term royalty interest on the commercialized AERx insulin product. -- In January, Virgil Thompson, a member of Aradigm's Board of Directors since 1995, was named Chairman of the Board. He replaced Richard Thompson, Aradigm's former President and Chief Executive Officer, who will remain on the Board as a Director. Currently President and Chief Executive Officer of Angstrom Pharmaceuticals, Virgil Thompson brings close to two decades of senior management experience within the biotech and pharmaceutical industries. Prior to joining Angstrom, Virgil Thompson held executive positions at Chimeric Therapies, Bio-Technology Group (now Savient Pharmaceuticals), Cytel Corporation, Cibus Pharmaceuticals and Syntex Laboratories, Inc.. -- In February, Dr. Bryan Lawlis, Aradigm's President and Chief Executive Officer, was made a member of the Board of Directors. In this position, Dr. Lawlis will be working closely with his fellow Board members as Aradigm executes on a new third party contract manufacturing strategy. Dr. Lawlis brings to the Board extensive operational expertise with positions prior to joining Aradigm as founder of Covance Biotechnology Services and senior operations positions at Genencor and Genentech. Annual Meeting of Shareholders Aradigm will hold its Annual Meeting of Shareholders on Thursday, May 19, 2005. The meeting will begin at 9:00 am Pacific Time at Aradigm's corporate headquarters located at 3929 Point Eden Way in Hayward, California. All shareholders are cordially invited to attend the event, which will include a presentation by senior management. Additional information can be found in the News and Events/Upcoming Events section of www.aradigm.com or by contacting Chris Keenan at Aradigm. 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: www.aradigm.com. The webcast and audio replay of the conference call will be available following the call, which 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 5486400#. Aradigm develops non-invasive delivery systems to enable patients to comfortably self-administer biopharmaceuticals and small molecules. The company's advanced AERx(R) pulmonary and Intraject(R) needle-free delivery technologies offer rapid delivery solutions for liquid drug formulations. Current development programs focus on neurological disorders, heart disease, respiratory conditions, diabetes and cancer. 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. NOTE: AERx and Intraject are registered trademarks of Aradigm. Contact: Chris Keenan Aradigm 510-265-9370 ARADIGM CORPORATION CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share information) (Unaudited) Three months ended March 31, ------------------------ 2005 2004 ---------- ---------- Contract revenues - From related parties $ 7,444 $ 6,610 Contract revenues - Other 270 33 Total Contract revenues 7,714 6,643 Research and development 7,070 11,887 General and administrative 3,235 2,536 Total operating expenses 10,305 14,423 Loss from operations (2,591) (7,780) Interest income 288 66 Interest and other expense (37) (10) Net loss $ (2,340) $ (7,724) Basic and diluted net loss per common share $ (0.03) $ (0.12) Shares used in computing basic and diluted net loss per common share 72,297 62,942 ARADIGM CORPORATION CONDENSED BALANCE SHEETS (In thousands) March 31, December 31, 2005 2004 ----------- ----------- (Unaudited) * ASSETS Current assets: Cash, cash equivalents and short-term investments $ 53,670 $ 16,763 Restricted Cash 200 -- Receivables 466 99 Current portion of notes receivable from officers and employees 63 67 Other current assets 635 1,602 Total current assets 55,034 18,531 Property and equipment, net 7,263 60,555 Noncurrent portion of notes receivable from officers and employees 206 216 Other assets 414 439 Total assets $ 62,917 $ 79,741 LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,966 $ 2,469 Accrued clinical and cost of other studies 345 293 Accrued compensation 1,969 2,984 Deferred revenue 199 7,525 Other accrued liabilities 711 1,138 Total current liabilities 5,190 14,409 Noncurrent portion of deferred revenue -- 3,966 Noncurrent portion of deferred rent 552 1,943 Redeemable convertible preferred stock 23,669 23,669 Shareholders' equity 33,506 35,754 Total liabilities, redeemable convertible preferred stock and shareholders' equity $ 62,917 $ 79,741 * The balance sheet at December 31, 2004 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. SOURCE Aradigm Corporation -0- 04/26/2005 /CONTACT: Chris Keenan of Aradigm Corporation, +1-510-265-9370/ /Web site: http://www.aradigm.com