Arena Pharmaceuticals Announces Second Consecutive Profitable Quarter With Sequential Quarterly Revenue Growth of 32% and Quarterly EPS of $0.05

Apr 17, 2001, 01:00 ET from Arena Pharmaceuticals

    SAN DIEGO, April 17 /PRNewswire/ --
 Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today reported results for the
 quarter ended March 31, 2001.  During the first quarter 2001, the Company's
 revenues increased by $1.3 million over the previous quarter to record
 revenues of $5.4 million versus no revenues for the first quarter of 2000.
 Revenues in the first quarter of 2001 were attributable to collaborations,
 which included research funding, milestone payments and technology access and
 development fees.  The Company reported net income in the first quarter of
 2001 of $1.1 million, or $.05 per share on a diluted basis.  In the
 corresponding quarter of 2000, Arena reported a net loss, before a non-cash
 preferred stock charge, of $3.1 million or $.32 per share on a pro forma
 basis.  The first quarter 2001 net income was reduced by non-cash charges
 related to amortization of deferred compensation of $1.3 million and
 amortization of goodwill and other intangibles of $128,000 relating to our
 acquisition of Bunsen Rush; excluding these non-cash charges, the first
 quarter 2001 net income was approximately $2.5 million, or $.11 per share on a
 diluted basis.  Cash and cash equivalents totaled $125.5 million at March 31,
 2001.
     "The first quarter was both challenging and rewarding as we assembled key
 infrastructure elements to enable Project Genesis.  We created our
 wholly-owned subsidiary BRL Screening, through the acquisition of Bunsen Rush
 to significantly expand our screening capability.  We also signed deals with
 Taisho Pharmaceutical, Celera Genomics and Affymetrix," stated Jack Lief,
 Arena's President and CEO.  Mr. Lief further noted that "Revenues increased by
 32% over the most recent quarter while operating expenses increased by only
 8%, and almost all of the operating expense increase was due to growth in our
 research spending.  I am proud of our financial accomplishments, including net
 income of $.05 per share for the first quarter of 2001, even after the
 significant financial effect of declines in interest rates together with
 soaring energy costs, which could have an even greater effect for the entire
 year.  I look forward to reporting continued progress in achieving our
 research goals while maintaining our profitable posture."
     Arena's CART Technology allows for the direct identification of modulators
 of G protein-coupled receptors in a ligand-independent manner, making the
 technology particularly useful with respect to orphan GPCRs, which are
 estimated to comprise approximately 2% of the human genome.  Such
 ligand-independent screening is made possible by genetic alteration of these
 receptors, using routinely applicable and proprietary genetic cassettes.
 Arena has recently initiated "Project Genesis," an internal program aimed at
 obtaining all of the human GPCRs, identifying the location of these receptors
 within normal and diseased tissue of the human body for purposes of
 understanding the function of such receptors, and screening each GPCR to
 identify receptor modulators that form the basis of drug candidates.  Arena's
 CART Technology, in conjunction with Arena's recent acquisition of Bunsen Rush
 Laboratories, Inc. via Arena's wholly-owned subsidiary BRL Screening, Inc.,
 and the recently announced genomics database subscription agreement with
 Celera Genomics, is intended to facilitate completion of Project Genesis
 within the next three to five years.
 
     Certain statements in this press release are forward-looking statements
 that involve a number of risks and uncertainties, and actual events or results
 may differ materially from Arena's and BRL Screening, Inc.'s expectations.
 Statements that are not historical facts, including statements which are
 preceded by, followed by, or that include the words "intends," "will,"
 "plans," "expects," "anticipates," "estimates," "aim" and "believes" or
 similar statements are forward-looking statements.  Important factors that
 could cause actual results to differ materially from those stated or implied
 by our forward looking statements due to risks and uncertainties associated
 with Arena's and BRL's business include, but are not limited to, the
 following: the ability to complete Project Genesis, if at all, within a
 reasonable time period; future quarterly or annual financial results; the
 timing, success and cost of preclinical research, out-licensing endeavors and
 clinical studies, and receipt of additional milestone payments, if any, from
 collaborators.  Additional risk factors that could cause actual results to
 differ materially from those in our forward looking statements are disclosed
 in Arena's SEC reports, including but not limited to Arena's Form S-1, most
 recent quarterly report on Form 10-Q, and most recent annual report on Form
 10-K.  These forward-looking statements represent Arena's judgment as of the
 date of this release.  Arena and BRL disclaim, however, any intent or
 obligation to update these forward-looking statements.
 
 
                          Arena Pharmaceuticals, Inc.
                 Condensed Consolidated Statement of Operations
 
                                          Three months ended March 31,
                                            2001                 2000
                                         (unaudited)          (unaudited)
 
      Revenues                           $5,392,335                $ --
 
      Operating expenses:
        Research and development          3,903,341           2,399,358
        General and administrative        1,025,983             423,828
        Amortization of non-cash
         deferred compensation            1,268,666             409,479
        Amortization of goodwill
         and other intangibles              128,083                  --
          Total operating expenses        6,326,073           3,232,665
 
        Interest and other income, net    2,018,732             110,465
 
        Net income (loss) applicable
         to common stockholders           1,084,994         (3,122,200)
 
        Non-cash preferred stock charge          --        (14,187,563)
 
        Net income (loss) applicable
         to common stockholders          $1,084,994       $(17,309,763)
 
        Net income (loss)
         per share, basic                     $0.05            $(15.92)
 
        Shares used in calculating
         net income (loss)
         per share, basic                22,226,922           1,086,988
 
        Net income (loss)
         per share, diluted                   $0.05            $(15.92)
 
        Shares used in calculating
         net income (loss)
         per share, diluted              23,202,193           1,086,988
 
        Pro forma net loss per share                            $(1.76)
 
        Shares used in calculating
         pro forma net loss per share                         9,827,102
 
 
     Note:  The loss per share on a pro forma basis assumes the conversion of
     the redeemable preferred stock into common stock as of the date of
     issuance.  The redeemable preferred stock converted into common stock at
     the closing of the Company's initial public offering on a one-for-one
     basis.
 
 
     Condensed Consolidated
     Balance Sheet Data:                 March 31,          December 31,
                                            2001                2000
                                        (unaudited)
      Assets
        Cash and cash equivalents      $125,503,323        $144,413,176
        Accounts receivable and
         other current assets             3,477,584           3,040,328
        Property and equipment, net      12,219,879           4,265,260
        Goodwill and other assets        15,420,372             993,165
          Total assets                 $156,621,158        $152,711,929
 
      Liabilities and Stockholders'
       Equity
        Liabilities                      $5,443,538          $3,927,604
        Stockholders' equity            151,177,620         148,784,325
          Total liabilities
           and stockholders' equity    $156,621,158        $152,711,929
 
 
     "Arena Pharmaceuticals" and the corporate logo are registered U.S.
 trademarks of the Company.  "Arena", "CART" and "BRL Screening" are trademarks
 of the Company.  Arena's headquarters are located at 6166 Nancy Ridge Drive,
 San Diego, CA 92121.  Arena's telephone number is (858) 453-7200.  On the
 Internet, please refer to the Investor Relations Center at Arena's website:
 http://www.arenapharm.com for further information.
 
     For further information, contact:
       Jack Lief, President & CEO: Extension 223
       Joseph Mooney, CFO: Extension 8-508
 
 

SOURCE Arena Pharmaceuticals
    SAN DIEGO, April 17 /PRNewswire/ --
 Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today reported results for the
 quarter ended March 31, 2001.  During the first quarter 2001, the Company's
 revenues increased by $1.3 million over the previous quarter to record
 revenues of $5.4 million versus no revenues for the first quarter of 2000.
 Revenues in the first quarter of 2001 were attributable to collaborations,
 which included research funding, milestone payments and technology access and
 development fees.  The Company reported net income in the first quarter of
 2001 of $1.1 million, or $.05 per share on a diluted basis.  In the
 corresponding quarter of 2000, Arena reported a net loss, before a non-cash
 preferred stock charge, of $3.1 million or $.32 per share on a pro forma
 basis.  The first quarter 2001 net income was reduced by non-cash charges
 related to amortization of deferred compensation of $1.3 million and
 amortization of goodwill and other intangibles of $128,000 relating to our
 acquisition of Bunsen Rush; excluding these non-cash charges, the first
 quarter 2001 net income was approximately $2.5 million, or $.11 per share on a
 diluted basis.  Cash and cash equivalents totaled $125.5 million at March 31,
 2001.
     "The first quarter was both challenging and rewarding as we assembled key
 infrastructure elements to enable Project Genesis.  We created our
 wholly-owned subsidiary BRL Screening, through the acquisition of Bunsen Rush
 to significantly expand our screening capability.  We also signed deals with
 Taisho Pharmaceutical, Celera Genomics and Affymetrix," stated Jack Lief,
 Arena's President and CEO.  Mr. Lief further noted that "Revenues increased by
 32% over the most recent quarter while operating expenses increased by only
 8%, and almost all of the operating expense increase was due to growth in our
 research spending.  I am proud of our financial accomplishments, including net
 income of $.05 per share for the first quarter of 2001, even after the
 significant financial effect of declines in interest rates together with
 soaring energy costs, which could have an even greater effect for the entire
 year.  I look forward to reporting continued progress in achieving our
 research goals while maintaining our profitable posture."
     Arena's CART Technology allows for the direct identification of modulators
 of G protein-coupled receptors in a ligand-independent manner, making the
 technology particularly useful with respect to orphan GPCRs, which are
 estimated to comprise approximately 2% of the human genome.  Such
 ligand-independent screening is made possible by genetic alteration of these
 receptors, using routinely applicable and proprietary genetic cassettes.
 Arena has recently initiated "Project Genesis," an internal program aimed at
 obtaining all of the human GPCRs, identifying the location of these receptors
 within normal and diseased tissue of the human body for purposes of
 understanding the function of such receptors, and screening each GPCR to
 identify receptor modulators that form the basis of drug candidates.  Arena's
 CART Technology, in conjunction with Arena's recent acquisition of Bunsen Rush
 Laboratories, Inc. via Arena's wholly-owned subsidiary BRL Screening, Inc.,
 and the recently announced genomics database subscription agreement with
 Celera Genomics, is intended to facilitate completion of Project Genesis
 within the next three to five years.
 
     Certain statements in this press release are forward-looking statements
 that involve a number of risks and uncertainties, and actual events or results
 may differ materially from Arena's and BRL Screening, Inc.'s expectations.
 Statements that are not historical facts, including statements which are
 preceded by, followed by, or that include the words "intends," "will,"
 "plans," "expects," "anticipates," "estimates," "aim" and "believes" or
 similar statements are forward-looking statements.  Important factors that
 could cause actual results to differ materially from those stated or implied
 by our forward looking statements due to risks and uncertainties associated
 with Arena's and BRL's business include, but are not limited to, the
 following: the ability to complete Project Genesis, if at all, within a
 reasonable time period; future quarterly or annual financial results; the
 timing, success and cost of preclinical research, out-licensing endeavors and
 clinical studies, and receipt of additional milestone payments, if any, from
 collaborators.  Additional risk factors that could cause actual results to
 differ materially from those in our forward looking statements are disclosed
 in Arena's SEC reports, including but not limited to Arena's Form S-1, most
 recent quarterly report on Form 10-Q, and most recent annual report on Form
 10-K.  These forward-looking statements represent Arena's judgment as of the
 date of this release.  Arena and BRL disclaim, however, any intent or
 obligation to update these forward-looking statements.
 
 
                          Arena Pharmaceuticals, Inc.
                 Condensed Consolidated Statement of Operations
 
                                          Three months ended March 31,
                                            2001                 2000
                                         (unaudited)          (unaudited)
 
      Revenues                           $5,392,335                $ --
 
      Operating expenses:
        Research and development          3,903,341           2,399,358
        General and administrative        1,025,983             423,828
        Amortization of non-cash
         deferred compensation            1,268,666             409,479
        Amortization of goodwill
         and other intangibles              128,083                  --
          Total operating expenses        6,326,073           3,232,665
 
        Interest and other income, net    2,018,732             110,465
 
        Net income (loss) applicable
         to common stockholders           1,084,994         (3,122,200)
 
        Non-cash preferred stock charge          --        (14,187,563)
 
        Net income (loss) applicable
         to common stockholders          $1,084,994       $(17,309,763)
 
        Net income (loss)
         per share, basic                     $0.05            $(15.92)
 
        Shares used in calculating
         net income (loss)
         per share, basic                22,226,922           1,086,988
 
        Net income (loss)
         per share, diluted                   $0.05            $(15.92)
 
        Shares used in calculating
         net income (loss)
         per share, diluted              23,202,193           1,086,988
 
        Pro forma net loss per share                            $(1.76)
 
        Shares used in calculating
         pro forma net loss per share                         9,827,102
 
 
     Note:  The loss per share on a pro forma basis assumes the conversion of
     the redeemable preferred stock into common stock as of the date of
     issuance.  The redeemable preferred stock converted into common stock at
     the closing of the Company's initial public offering on a one-for-one
     basis.
 
 
     Condensed Consolidated
     Balance Sheet Data:                 March 31,          December 31,
                                            2001                2000
                                        (unaudited)
      Assets
        Cash and cash equivalents      $125,503,323        $144,413,176
        Accounts receivable and
         other current assets             3,477,584           3,040,328
        Property and equipment, net      12,219,879           4,265,260
        Goodwill and other assets        15,420,372             993,165
          Total assets                 $156,621,158        $152,711,929
 
      Liabilities and Stockholders'
       Equity
        Liabilities                      $5,443,538          $3,927,604
        Stockholders' equity            151,177,620         148,784,325
          Total liabilities
           and stockholders' equity    $156,621,158        $152,711,929
 
 
     "Arena Pharmaceuticals" and the corporate logo are registered U.S.
 trademarks of the Company.  "Arena", "CART" and "BRL Screening" are trademarks
 of the Company.  Arena's headquarters are located at 6166 Nancy Ridge Drive,
 San Diego, CA 92121.  Arena's telephone number is (858) 453-7200.  On the
 Internet, please refer to the Investor Relations Center at Arena's website:
 http://www.arenapharm.com for further information.
 
     For further information, contact:
       Jack Lief, President & CEO: Extension 223
       Joseph Mooney, CFO: Extension 8-508
 
 SOURCE  Arena Pharmaceuticals