Aradigm Announces Third Quarter 2011 Financial Results

HAYWARD, Calif.--(BUSINESS WIRE)-- Aradigm Corporation (OTCBB:ARDM) (the “Company”) today announced financial results for the third quarter and nine months ended September 30, 2011.

Total revenue was approximately $0.2 million for the third quarter of 2011, compared with approximately $0.2 million for the third quarter of 2010. Revenue for both periods reflects the quarterly royalty payment from Zogenix, Inc. for product sales of SUMAVEL® DosePro™ needle-free delivery system for the treatment of acute migraine and cluster headaches.

The Company’s net loss for the third quarter of 2011 was approximately $2.4 million, or $0.01 per share, compared with net income of approximately $1.3 million, or $0.01 per share, for the third quarter of 2010. Net income for the third quarter of 2010 was derived from the non-cash gain on the extinguishment of debt from the Novo Nordisk A/S equity for debt transaction. Total operating expenses for the third quarter of 2011 were approximately $2.3 million, compared with total operating expenses of approximately $3.3 million for the third quarter of 2010. The decrease in operating expenses was primarily due to expense reduction efforts and lower clinical and manufacturing costs for the inhaled ciprofloxacin program versus the prior year period.

As of September 30, 2011, cash, cash equivalents and short-term investments totaled approximately $10.7 million.

About inhaled ciprofloxacin

Ciprofloxacin is a widely prescribed antibiotic to treat infections of the lung frequently experienced by cystic fibrosis (CF) and non-cystic fibrosis bronchiectasis (BE) patients. It is often preferred because of its broad-spectrum anti-bacterial action. The available oral and intravenous formulations of the drug are used to treat episodes of acute exacerbations of lung infections in CF patients. The Company’s once-a-day novel inhaled formulations of ciprofloxacin are encapsulated in liposomes, allowing for a sustained release of the drug within the lung and improving airway tolerability. The formulations are to be used for chronic maintenance therapy as they are expected to achieve higher antibiotic concentration at the site of infection and relatively low systemic antibiotic concentrations to minimize side-effects. Lipoquin™ (CFI, ARD-3100) is a liposomal formulation of ciprofloxacin. Pulmaquin™ is a dual release formulation (DRCFI, ARD-3150) that is a mixture of Lipoquin with unencapsulated ciprofloxacin.

The Phase 2b study ORBIT-2 (Once-Daily Respiratory Bronchiectasis Inhalation Treatment) was a 168 day, double-blind, placebo-controlled trial in 42 randomized BE patients with once daily Pulmaquin (ARD-3150) that resulted in excellent reduction of Pseudomonas aeruginosa colony forming units (CFUs), as well as a significant increase in the time to first exacerbation in the active group vs. placebo. Most recently, the Company reported positive top line data from the Phase 2b study ORBIT-1 with Lipoquin (ARD-3100) in patients with non-cystic fibrosis bronchiectasis. The primary endpoint – the mean change in Pseudomonas aeruginosa CFUs from baseline to day 28 – was met in the full analysis population with both the 2 mL and 3 mL doses vs. placebo. The Company previously reported positive results in Phase 2a studies of 22 CF patients and 36 BE patients who received Lipoquin (ARD-3100) once-a-day for 2 (CF) or 4 (BE) weeks, respectively. The Company is also developing these formulations as a potential medication for the prevention and treatment of bioterrorism infections, such as inhaled anthrax and tularemia. Aradigm has been granted orphan drug designation for liposomal ciprofloxacin for cystic fibrosis in the U.S. and the E.U., and for liposomal ciprofloxacin and for inhaled ciprofloxacin for BE in the U.S.

About Aradigm

Aradigm is an emerging specialty pharmaceutical company focused on the development and commercialization of a portfolio of drugs delivered by inhalation for the treatment of severe respiratory diseases by pulmonologists. The Company has product candidates addressing the treatment of bronchiectasis, cystic fibrosis, inhalation anthrax and tularemia infections and smoking cessation.

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, including, but not limited to, statements regarding the product development efforts for the inhaled liposomal ciprofloxacin program and continued receipt of royalties from Zogenix, Inc. These forward-looking statements involve risk and uncertainties, as well as the other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC on March 25, 2011, and the Company’s Quarterly Reports on Form 10-Q.

Aradigm, the Aradigm Logo, Lipoquin and Pulmaquin are registered trademarks of Aradigm Corporation.

   
ARADIGM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)
 
 

Three months ended
September 30,

Nine months ended
September 30,

2011   2010 2011   2010
 
Revenues $ 242     $ 239   $ 608     $ 4,239  
Operating expenses:
Research and development 1,292 2,403 4,356 7,976
General and administrative 1,020 895 3,595 3,530
Restructuring and asset impairment 10 11 30 37
           
Total operating expenses   2,322       3,309     7,981       11,543  
 
Loss from operations (2,080 ) (3,070 ) (7,373 ) (7,304 )
 
Interest income 6 3 9 17
Interest expense (375 ) (95 ) (428 ) (313 )

Other income, net

- 15 2 121
Gain from extinguishment of debt - 4,462 - 4,462
           
Net income /(loss) $ (2,449 )   $ 1,315   $ (7,790 )   $ (3,017 )
Basic and diluted net income /(loss) per common share $ (0.01 )   $ 0.01   $ (0.04 )   $ (0.03 )
 
Shares used in computing basic net income /(loss) per common share   194,549       139,167     178,561       114,787  
 
 
Shares used in computing diluted net income /(loss) per common share   194,549       140,177     178,561       114,787  
 
   
ARADIGM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 

September 30,
2011

December 31,
2010

(Unaudited)   *
ASSETS
Current assets:
Cash and cash equivalents $ 2,074 $ 5,295
Short-term investments 8,658 251
Receivables 51 180
Prepaid and other current assets 396 180
     
Total current assets 11,179 5,906
Property and equipment, net 1,215 1,553
Notes receivable 56 54
Other assets 568 115
     
Total assets $ 13,018   $ 7,628
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Accounts payable $ 176 $ 257
Accrued clinical and cost of other studies 538 993
Accrued compensation 346 327
Facility lease exit obligation 114 99
Other accrued liabilities   485     450
 
Total current liabilities 1,659 2,126
Deferred rent 127 99
Facility lease exit obligation, non-current 640 729
Other non-current liabilities 75 75
Note payable, net of discount and accrued interest 8,208 -
Shareholders' equity 2,309 4,599
     
Total liabilities and shareholders' equity $ 13,018   $ 7,628
 
 

* The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date.

 



CONTACT:

Aradigm Corporation
Nancy Pecota, 510-265-8800
Chief Financial Officer

KEYWORDS:   United States  North America  California

INDUSTRY KEYWORDS:   Health  Biotechnology  Clinical Trials  Infectious Diseases  Pharmaceutical

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