UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
  
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 10, 2015
 
 
Arena Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
 
 
Delaware
 
000-31161
 
23-2908305
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
6154 Nancy Ridge Drive, San Diego, California 92121
(Address of principal executive offices) (Zip Code)
858.453.7200
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



In this report, “Arena Pharmaceuticals,” “Arena,” “Company,” “we,” “us” and “our” refer to Arena Pharmaceuticals, Inc., and/or one or more of our wholly owned subsidiaries, unless the context otherwise provides. Arena Pharmaceuticals® and Arena® are registered service marks of Arena Pharmaceuticals, Inc.

Item 2.02 Results of Operations and Financial Condition.

On November 10, 2015, we issued a press release reporting our financial results for the third quarter ended September 30, 2015. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d)    Exhibits.
99.1
Press release issued November 10, 2015, reporting financial results for the third quarter ended September 30, 2015



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: November 10, 2015
Arena Pharmaceuticals, Inc.
 
 
 
 
By: 
 
/s/ Steven W. Spector
 
 
 
Steven W. Spector
 
 
 
Executive Vice President, General Counsel and Secretary


2


EXHIBIT INDEX

Exhibit No.
Description
99.1
Press release issued November 10, 2015, reporting financial results for the third quarter ended September 30, 2015





Contact: Arena Pharmaceuticals, Inc.

Craig M. Audet, Ph.D., Senior Vice President,
Operations & Head of Global Regulatory Affairs
caudet@arenapharm.com
858.453.7200, ext. 1612


www.arenapharm.com
 
 


Arena Pharmaceuticals Reports Third Quarter 2015 Financial Results and
Provides Corporate Update

-- Conference Call and Webcast Scheduled for Today at 5:00 p.m. Eastern Time --

SAN DIEGO, CA, November 10, 2015 - Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) today reported financial results for the third quarter ended September 30, 2015, and provided a corporate update.

“On October 27, we announced a plan to improve efficiencies and reduce costs as we chart a new course for Arena with our refocusing effort,” said Harry F. Hixson, Jr., Arena’s interim Chief Executive Officer. “As we head into 2016, we intend to continue to implement this plan to be sure we are taking full advantage of our key strengths in a strategic, optimized manner.”

Third Quarter and Recent Developments

Corporate Update

Announced plans to improve efficiencies and reduce costs as it focuses on the advancement of its research and development priorities. As part of this initiative, Arena reduced its US workforce by approximately 80 employees or 35%, which is expected to reduce annualized cash expenditures for personnel by approximately $11.0 million. Arena plans to implement additional cost control measures to further reduce its expenditures, including reductions at its Swiss manufacturing facility, Arena Pharmaceuticals GmbH.

Research and Development Update

Announced the initiation of a Phase 2 proof-of-concept clinical trial of APD334, an oral Sphingosine 1-Phosphate Subtype 1 receptor modulator for autoimmune diseases, being studied in this trial for the treatment of ulcerative colitis.

Announced the initiation of a Phase 1b multiple-ascending dose clinical trial of APD371, a selective and potent agonist of the cannabinoid 2 receptor.

Axovant Sciences Ltd. acquired all of Roivant Sciences Ltd.’s rights to nelotanserin, an inverse agonist of the serotonin 2A receptor internally discovered by Arena. Arena previously granted Roivant, Axovant’s parent company, exclusive worldwide rights to develop and commercialize nelotanserin under a Development, Marketing and Supply Agreement. Axovant announced that it intends to initiate two Phase 2 clinical trials with nelotanserin in the first quarter of 2016, with the first trial in patients with either dementia with Lewy bodies, or Parkinson’s disease dementia who suffer from visual hallucinations, and the second trial in dementia with Lewy bodies patients experiencing REM Behavior Disorder.




BELVIQ® (lorcaserin HCl) Update

Eisai acknowledged difficulties in the US anti-obesity market and announced plans to focus on patients and physicians in certain areas of the US where there is insurance coverage and a need for treatment options.

IMS Health estimates that approximately 157,000 prescriptions for BELVIQ were filled in the US in the third quarter of 2015, representing growth in total prescriptions of approximately 9.8% compared to the same quarter of last year and a decrease of 14.4% compared to the previous quarter.

Ildong Pharmaceutical Co., Ltd., estimates that approximately 2.1 million tablets of BELVIQ were prescribed in South Korea in the third quarter of 2015, which equates to approximately 34,400 one-month prescriptions, representing growth in total prescriptions of approximately 18.6% compared to the previous quarter.

Announced that the US Patent and Trademark Office granted Arena US Patent No. 9,169,213, entitled “Method of Weight Management,” covering BELVIQ for chronic weight management. The patent is based on the discovery that achieving 5% weight loss with BELVIQ by Week 12 is a strong predictor of responses in weight loss at Week 52 of treatment.

Third Quarter 2015 Financial Results

Revenues totaled $9.1 million, including $4.9 million in net product sales of BELVIQ.
Research and development expenses totaled $22.1 million.
General and administrative expenses totaled $9.0 million.
Net loss was $26.4 million, or $0.11 per share.
At September 30, 2015, cash and cash equivalents totaled $181.3 million and approximately 242.4 million shares of common stock were outstanding.

Scheduled Conference Call and Webcast

Arena will host a conference call and webcast today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to provide a corporate update and report third quarter 2015 financial results. The conference call may be accessed by dialing 877.643.7155 for domestic callers and 914.495.8552 for international callers. Please specify to the operator that you would like to join the “Arena Pharmaceuticals’ Third Quarter 2015 Financial Results and Corporate Update Conference Call.” The conference call will be webcast live under the investor relations section of Arena’s website at www.arenapharm.com, and will be archived there for 30 days following the call. Please connect to Arena’s website several minutes prior to the start of the broadcast to ensure adequate time for any software download that may be necessary.

About BELVIQ® (lorcaserin HCl) CIV

BELVIQ is approved by the US Food and Drug Administration to be used along with a reduced-calorie diet and increased physical activity for chronic weight management in adult patients with an initial body mass index of:

30 kg/m2 or greater (obese), or
27 kg/m2 or greater (overweight) in the presence of at least one weight-related comorbid condition (e.g., hypertension, dyslipidemia, type 2 diabetes).




Limitations of Use:

The safety and efficacy of coadministration of BELVIQ with other products intended for weight loss including prescription drugs (e.g., phentermine), over-the-counter drugs, and herbal preparations have not been established.
The effect of BELVIQ on cardiovascular morbidity and mortality has not been established.

In clinical trials, the most common adverse reactions for patients without diabetes treated with BELVIQ were headache, dizziness, fatigue, nausea, dry mouth, and constipation, and, in patients with diabetes, the most common adverse reactions were hypoglycemia, headache, back pain, cough, and fatigue.

For additional information about BELVIQ, including important safety information, click here for the full Prescribing Information or visit www.BELVIQ.com.

About Arena Pharmaceuticals

Arena embraces the challenge of improving health by seeking to bring innovative medicines targeting G protein-coupled receptors to patients. Arena’s focus is discovering, developing and commercializing drugs to address unmet medical needs, and BELVIQ® (lorcaserin HCl) is Arena’s first internally discovered drug approved for marketing. Arena has US operations located in San Diego, California, and operations outside of the United States, including its commercial manufacturing facility, located in Zofingen, Switzerland. For more information, visit Arena’s website at www.arenapharm.com.

Arena Pharmaceuticals® and Arena® are registered service marks of Arena Pharmaceuticals, Inc. BELVIQ® is a registered trademark of Arena Pharmaceuticals GmbH.

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 include statements about Arena’s workforce reduction, plans and refocusing effort, including with respect to implementing the plan, improving efficiencies, reducing costs, implementing cost control measures, taking advantage of strengths, advancing research and development, expected outcome and other related activities and expectations; the progress, study, therapeutic indication, mechanism of action and potential of compounds and other aspects of research and development; rights, activities and expectations with respect to collaborations; the therapeutic indication, use, safety, efficacy, mechanism of action and potential of BELVIQ or lorcaserin; patent coverage; embracing the challenge of improving health; seeking to bring innovative medicines to patients; and Arena’s focus, plans, goals, strategy, expectations, research and development programs, and ability to discover and develop compounds and commercialize drugs. 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 commercializing drugs, including regulatory, manufacturing, supply and marketing issues and the availability and use of BELVIQ or lorcaserin; cash and revenues generated from BELVIQ, including the impact of competition; the risk that Arena’s revenues are based in part on estimates, judgment and accounting policies, and incorrect estimates or disagreement regarding estimates or accounting policies may result in changes to Arena’s guidance or previously reported results; the timing and outcome of regulatory review is uncertain, and lorcaserin may not be approved for marketing in combination with another drug, for another indication or using a different formulation or in any other territory for any indication; regulatory decisions in one territory may impact other regulatory decisions and Arena’s business prospects; government and commercial reimbursement and



pricing decisions; risks related to relying on collaborative arrangements; the timing and receipt of payments and fees, if any, from collaborators; the entry into or modification or termination of collaborative arrangements; unexpected or unfavorable new data; nonclinical and clinical data is voluminous and detailed, and 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; data and other information related to any of Arena’s research and development may not meet regulatory requirements or otherwise be sufficient for (or Arena or a collaborator may not pursue) further research and development, regulatory review or approval or continued marketing; Arena’s and third parties’ intellectual property rights; the timing, success and cost of Arena’s research and development and related strategy and decisions; results of clinical trials and other studies are subject to different interpretations and may not be predictive of future results; clinical trials and other studies may not proceed at the time or in the manner expected or at all; having adequate funds; and satisfactory resolution of litigation or other disagreements with others. 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. 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
 
Nine months ended
 
 
September 30,
 
September 30,
 
 
2015
 
2014
 
2015
 
2014
 
 
(unaudited)
 
(unaudited)
 
Revenues
 
 
 
 
 
 
 
 
Net product sales
$
4,884
 
 
$
5,726
 
 
$
15,787
 
 
$
12,137
 
 
Other Eisai collaborative revenue
2,065
 
 
2,133
 
 
7,414
 
 
14,034
 
 
Toll manufacturing
1,463
 
 
158
 
 
3,199
 
 
1,184
 
 
Other collaborative revenue
726
 
 
147
 
 
4,175
 
 
424
 
 
Total revenues
9,138
 
 
8,164
 
 
30,575
 
 
27,779
 
 
 
 
 
 
 
 
 
 
 
Operating Costs & Expenses
 
 
 
 
 
 
 
 
Cost of product sales
1,635
 
 
1,755
 
 
6,129
 
 
4,049
 
 
Cost of toll manufacturing
1,584
 
 
81
 
 
3,798
 
 
1,124
 
 
Research & development
22,072
 
 
24,508
 
 
68,241
 
 
72,521
 
 
General & administrative
9,028
 
 
8,029
 
 
26,311
 
 
25,198
 
 
Total operating costs & expenses
34,319
 
 
34,373
 
 
104,479
 
 
102,892
 
 
 
 
 
 
 
 
 
 
 
Interest & Other Income (Expense)
 
 
 
 
 
 
 
 
Interest income
37
 
 
16
 
 
105
 
 
69
 
 
Interest expense
(1,683
)
 
(1,723
)
 
(5,133
)
 
(5,205
)
 
Gain from valuation of derivative liabilities
852
 
 
2,593
 
 
474
 
 
3,489
 
 
Gain on sale of available-for-sale securities
0
 
 
16,276
 
 
0
 
 
49,553
 
 
Other
(443
)
 
(1,625
)
 
938
 
 
(1,240
)
 
Total interest & other income (expense), net
(1,237
)
 
15,537
 
 
(3,616
)
 
46,666
 
 
Net loss
$
(26,418
)
 
$
(10,672
)
 
$
(77,520
)
 
$
(28,447
)
 
 
 
 
 
 
 
 
 
 
Net loss per share:
 
 
 
 
 
 
 
 
 
 
Basic
$
(0.11
)
 
$
(0.05
)
 
$
(0.32
)
 
$
(0.13
)
 
Diluted
$
(0.11
)
 
$
(0.05
)
 
$
(0.32
)
 
$
(0.13
)
 
 
 
 
 
 
 
 
 
 
Shares used in calculating net loss per share:
 
 
 
 
 
 
 
 
Basic
242,257
 
 
219,866
 
 
240,033
 
 
219,592
 
 
Diluted
242,257
 
 
219,866
 
 
240,033
 
 
219,592
 
 




Arena Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheet Data
(In thousands)
 
 
 
 
 
 
September 30, 2015
 
December 31, 20141
 
 
(unaudited)
 
 
 
Assets
 
 
 
 
Cash & cash equivalents
$
181,280

 
$
163,209

 
Accounts receivable
3,514

 
3,712

 
Inventory
10,243

 
10,831

 
Prepaid expenses & other current assets
5,179

 
4,144

 
Land, property & equipment, net
74,752

 
82,919

 
Intangibles & other non-current assets
11,159

 
11,570

 
Total assets
$
286,127

 
$
276,385

 
 
 
 
 
 
Liabilities & Stockholders’ Equity
 
 
 
 
Accounts payable & accrued liabilities
$
21,511

 
$
49,158

 
Total deferred revenues
113,060

 
108,302

 
Derivative liabilities
0

 
474

 
Total lease financing obligations & other long-term liabilities
69,355

 
71,106

 
Total stockholders’ equity
82,201

 
47,345

 
Total liabilities & stockholders’ equity
$
286,127

 
$
276,385

 


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


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