Arena Reports Fourth Quarter and Full Year 2021 Financial Results and Key Program Updates

Rhea-AI Summary

Arena Pharmaceuticals (Nasdaq: ARNA) provided a corporate update and reported its Q4 and full-year 2021 results. The company is advancing its Phase 3 ELEVATE program for etrasimod in ulcerative colitis, expecting topline data in Q1 2022. In 2021, Arena's research and development expenses increased to $419.5 million, while revenues were minimal at $0.1 million. The net loss for the year was $616.4 million, or $10.14 per share. Cash reserves stood at $0.7 billion at year-end, down from $1.1 billion in 2020, reflecting substantial operational expenditures amid ongoing clinical trials.

Positive

• On track for Q1 2022 topline data readout in Phase 3 ELEVATE program for etrasimod.
• Completed target enrollment for Phase 2/3 CULTIVATE trial for etrasimod in Crohn's disease.

Negative

• Q4 2021 net loss increased to $155.6 million from $122.2 million in Q4 2020.
• Full-year 2021 net loss was $616.4 million, or $10.14 per share.
• Cash reserves decreased to $0.7 billion from $1.1 billion year-over-year.

– Phase 3 ELEVATE UC 52 and 12 on course for Q1 2022 topline data readout

PARK CITY, Utah--(BUSINESS WIRE)-- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today provided a corporate update and reported financial results for the fourth quarter and full year ended December 31, 2021.

Key Program & Corporate Updates

• In December announced that Pfizer Inc. and Arena entered into a definitive agreement under which Pfizer has agreed to acquire Arena
• In November achieved target enrollment for Study A in the Phase 2/3 CULTIVATE trial for etrasimod in Crohn’s disease
• In November the first participant was randomized in the Phase 2 trial for temanogrel in Raynaud’s phenomenon secondary to systemic sclerosis
• Phase 3 ELEVATE program for etrasimod in ulcerative colitis remains on track for topline data readout in Q1 2022

Fourth Quarter and Full Year End Financial Updates
Fourth Quarter 2021 Financial Results

• Research and development (R&D) expenses for the fourth quarter totaled $110.3 million compared to $100.4 million in the same period in 2020. This increase was primarily driven by our advancing clinical studies, including the etrasimod Phase 3 program, as well as an increase in personnel expenses to support our clinical programs. The R&D non-cash, share-based compensation was $8.4 million in the fourth quarter as compared to $6.5 million in the same period in 2020
• Selling, general and administrative (SG&A) expenses for the fourth quarter totaled $34.5 million, compared to $34.9 million in the same period in 2020. This decrease was primarily driven by a decline in SG&A non-cash, share-based compensation partially offset by an increase in salary and other personnel expenses. The SG&A non-cash, share-based compensation was $9.8 million in the fourth quarter as compared to $13.5 million in the same period in 2020
• Net loss for the fourth quarter was $155.6 million compared to a net loss of $122.2 million for the same period in 2020
• Basic and diluted net loss per share for the fourth quarter was $2.54 compared to basic and diluted net loss per share of $2.10 for the same period in 2020
• Cash, cash equivalents and marketable securities were $0.7 billion at December 31, 2021 as compared to $1.1 billion at December 31, 2020

Full Year 2021 Financial Results

• Revenues totaled $0.1 million
• Research and development expenses totaled $419.5 million, including $33.5 million related to non-cash share-based compensation
• Selling, general and administrative expenses totaled $126.2 million, including $36.9 million related to non-cash share-based compensation
• Net loss was $616.4 million, or $10.14 per share

We will not be holding a conference call to discuss these financial results or corporate update in light of the proposed transaction with Pfizer announced on December 13, 2021.

About Arena Pharmaceuticals

ARENA Pharmaceuticals is a team with a singular purpose – deliver important medicines to patients.

In a rapidly changing global market, we work with a sense of urgency every day to understand the needs of all our stakeholders, identify bold, sometimes disruptive, ideas to get medicines to patients, and relentlessly execute until it’s done.

ARENA - Care More. Act Differently.

Etrasimod and temanogrel are investigational compounds that are not approved for any use in any country.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements may be identified by words such as “on course” and “on track” and include, without limitation, statements about the following: the proposed acquisition of Arena by Pfizer and the timing of data readouts for ongoing trials. For such statements, Arena claims the protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from Arena’s expectations. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, the following: risks related to the satisfaction or waiver of the conditions to closing the proposed acquisition (including the failure to obtain necessary regulatory approvals) in the anticipated timeframe or at all, including the possibility that the proposed acquisition does not close; clinical trials and other studies may not proceed at the time or in the manner expected or at all; topline data may not accurately reflect the complete results of a particular study or trial; results of clinical trials and other studies are subject to different interpretations and may not be predictive of future results; the duration and severity of the coronavirus disease (COVID-19) pandemic, including but not limited to the impact on Arena’s clinical operations, the operations of Arena’s suppliers, partners, collaborators, licensees, and capital markets, which in each case remains uncertain; risks related to unexpected or unfavorable new data; the risk that regulatory agencies may interpret or weigh the importance of data differently and reach different conclusions than Arena or others, request additional information, have additional recommendations or change their guidance or requirements before or after approval; satisfactory resolution of litigation or other disagreements with others; and risks related to the enforcement of Arena’s and third parties’ intellectual property rights. Additional factors that could cause actual results to differ materially from those stated or implied by Arena’s forward-looking statements are disclosed in Arena’s filings with the Securities and Exchange Commission (SEC), including but not limited to Arena’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, which was filed with the SEC on November 4, 2021. These forward-looking statements represent Arena’s judgment as of the time of this release. Arena disclaims any intent or obligation to update these forward-looking statements, other than as may be required under applicable law.

Arena Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts)
	Three Months Ended December 31,								Year Ended December 31,
		2021				2020				2021				2020
	(unaudited)
Revenues:
Collaboration and other revenue	$	54			$	37			$	54			$	57
Royalty revenue		—				—				—				262
Total revenues		54				37				54				319
Operating Costs and Expenses:
Research and development		110,341				100,441				419,509				323,740
Acquired in-process research and development		—				—				70,000				—
Selling, general and administrative		34,505				34,897				126,206				103,218
Transaction costs		8,638				—				8,638				—
Total operating costs and expenses		153,484				135,338				624,353				426,958
Loss from operations		(153,430	)			(135,301	)			(624,299	)			(426,639	)
Total interest and other income (expense), net		(2,179	)			13,140				7,866				21,905
Net loss	$	(155,609	)		$	(122,161	)		$	(616,433	)		$	(404,734	)
Net loss per share, basic and diluted:	$	(2.54	)		$	(2.10	)		$	(10.14	)		$	(7.39	)
Shares used in calculating net loss per share, basic and diluted:		61,378				58,288				60,776				54,767

Arena Pharmaceuticals, Inc. Condensed Consolidated Balance Sheet Data (In thousands) (Unaudited)
	December 31, 2021			December 31, 2020
	(1)			(1)
Assets
Cash and cash equivalents	$	224,572		$	219,544
Prepaid expenses and other current assets		18,996			35,266
Total available-for-sale investments		486,693			884,497
Land, property and equipment, net		19,125			22,090
Other non-current assets		35,319			29,323
Total assets	$	784,705		$	1,190,720
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities		61,264			53,676
Total lease financing obligations & other long-term liabilities		50,204			56,575
Total stockholders’ equity		673,237			1,080,469
Total liabilities & stockholders’ equity	$	784,705		$	1,190,720

______________________
(1) The Condensed Consolidated Balance Sheet Data has been derived from the audited financial statements as of that date.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220223005276/en/

Patrick Malloy

Arena Pharmaceuticals, Inc.

Vice President, Investor Relations & Corporate Communications

pmalloy@arenapharm.com

847.987.4878

Sara Doran

Arena Pharmaceuticals, Inc.

Associate Director, Investor Relations & Corporate Communications

sdoran@arenapharm.com

Source: Arena Pharmaceuticals, Inc.

FAQ

What were Arena Pharmaceuticals' financial results for Q4 2021?

Arena Pharmaceuticals reported a net loss of $155.6 million for Q4 2021, compared to a net loss of $122.2 million in Q4 2020.

What is the expected timeline for Arena Pharmaceuticals' Phase 3 ELEVATE program?

The Phase 3 ELEVATE program for etrasimod in ulcerative colitis is on track for topline data readout in Q1 2022.

How much cash did Arena Pharmaceuticals have at the end of 2021?

As of December 31, 2021, Arena Pharmaceuticals had cash, cash equivalents, and marketable securities totaling $0.7 billion.

What was Arena Pharmaceuticals' revenue for the full year 2021?

Arena Pharmaceuticals reported total revenue of $0.1 million for the full year 2021.

How much did Arena Pharmaceuticals spend on R&D in 2021?

In 2021, Arena Pharmaceuticals' research and development expenses totaled $419.5 million.