Aryx Therapeutics reports Q2 2009 financials

ARYx Therapeutics, Inc. (NASDAQ:ARYX) today reported results of operations and provided a general business update for the second quarter ended June 30, 2009.

“During the second quarter, we completed the Phase 2/3 EmbraceAC clinical trial comparing tecarfarin, ARYx’s novel oral anticoagulant, to warfarin and have now completed extensive subanalyses of the data. As we continue to discuss the trial results with potential tecarfarin partners, we are also planning to meet with the Food and Drug Administration (FDA) to confirm the regulatory path to approval for the compound. Our further analyses of the substantial data set from the study confirm that the diligence of the trial’s dose control center led to the exceptional warfarin result. We believe this vigilance resulted in our missing the primary endpoint intended to show superiority of our drug. In addition, some of the further subanalyses point to specific differences between tecarfarin and warfarin treated patients that we believe could be confirmed in the second Phase 3 study to be conducted in a real world setting,” said Dr. Paul Goddard, chairman and chief executive officer of ARYx. “Of course, our immediate focus remains on the partnering of our three lead compounds, with our top near-term priority being the completion of a partnership of our antiarrythmic agent, budiodarone.”

Company Highlights

• ARYx announced on July 7, 2009 data from the Phase 2/3 clinical trial of its novel, oral anticoagulant, tecarfarin (formerly ATI-5923), compared to the leading anticoagulant agent, warfarin. The results continued to demonstrate tecarfarin’s strong, predictable anticoagulant effect, in line with prior tecarfarin trials. ARYx believes that tecarfarin remains on an approvable regulatory track, even though the primary endpoint of superiority to warfarin was not met. The company is planning to meet with the FDA on next steps to agree on the path forward. At the same time, ARYx also continues its efforts to license the drug to a major pharmaceutical company;
• In a sub analysis performed subsequent to the original primary efficacy and safety analysis, and on data collected from the EmbraceAC trial through the complete blinded period, the company focused on patients who were also taking concomitant medications known to inhibit cytochrome P450 2C9, the enzyme that affects the clearance of warfarin. Such medications included amiodarone (atrial fibrillation), lovastatin and fenofibrate (cholesterol lowering), and sertraline (depression), and were taken by about 30% of the enrolled patients. In patients with a targeted INR range of 2-3, the observed time in therapeutic range for this subpopulation was 69.3% on tecarfarin versus 64.9% on warfarin. This difference was statistically significant>
• The highest short-term priority for ARYx continued to be securing a potential partnership for budiodarone (formerly ATI-2042), an agent for the treatment of atrial fibrillation. Significantly, since the end of the second quarter, Multaq®, the atrial fibrillation therapy from Sanofi-aventis, has been launched in the United States with the labeled indication of reduction in risk of cardiovascular related hospitalizations, and at a favorable price of more than $7.00 per day. ARYx believes this strengthens the partnering prospects for budiodarone since published data (Mehra at al; Heart Rhythm; 2004;1, B64-B69) correlated a reduction in atrial fibrillation burden (the primary endpoint in the budiodarone Phase 2b clinical trial CLN-205 where statistical significance was demonstrated) directly to a reduction of cardiovascular hospitalizations in patients. The company believes there is a strong likelihood a budiodarone partnership with a large pharmaceutical company can be completed within the next couple of months;
• Partnering efforts on ATI-7505, an agent to treat various gastrointestinal disorders, continued during the quarter. Initial presentations of the product have been made to leading large and specialty pharmaceutical companies with a gastrointestinal therapeutic focus;
• ARYx’s cash position of $22.6 million as of June 30, 2009 is sufficient to fund operations through the first quarter of 2010, by which time the company currently expects to complete at least one corporate partnership.

Financial Results

As of June 30, 2009, ARYx had cash, cash equivalents and marketable securities totaling $22.6 million, which is in line with previous cash flow projections.

For the quarter, ARYx reported a net loss of $9.4 million or $0.34 per share, compared to a net loss of $11.9 million or $0.67 cents per share in the same quarter of 2008.

ARYx had no revenue in the second quarter of 2009 compared to revenue of $1.1 million for the second quarter of 2008. Revenues in 2008 were earned pursuant to the company's former collaboration agreement with Procter & Gamble Pharmaceuticals. That agreement was terminated in July 2008, with all payments to ARYx fully earned by the third quarter of 2008.

Research and development expenses for the second quarter of 2009 were $6.3 million, compared to $10.0 million during the same period of 2008. The decrease in 2009 is primarily due to the completion of the Phase 2b clinical trial of budiodarone in December 2008, lower drug manufacturing costs in support of the tecarfarin Phase 2/3 clinical trial, lower costs related to the ATI-9242 product candidate due to the substantial completion of a Phase 1 clinical study, and a reduction in other research-related expenditures. With the exception of costs related to the ongoing 100-patient extension study of EmbraceAC and wrap-up costs related to the recently completed 600-patient EmbraceAC study, external clinical costs for the remainder of the year are expected to decline significantly.

ARYx's general and administrative expenses during the second quarter of 2009 were $2.6 million compared with $2.7 million for the same period last year. The decrease in expense for 2009 is primarily due to a restructuring of ARYx’s executive bonus compensation plan to a contingent milestone basis as outlined in the company’s 2009 proxy statement filed with the Securities and Exchange Commission on April 22, 2009. Second quarter expense also includes approximately $390,000 of non-cash stock compensation expense.

Conference Call and Webcast Information

ARYx will host a conference call and simultaneous Webcast on Thursday, August 13, 2009 at 8:00 a.m. Pacific Time to review the results for second quarter 2009 and to provide a general business update on the company. The Webcast will be available live via the Internet by accessing the ARYx Website at www.aryx.co . Alternatively, the call can be accessed by dialing 877-440-5784. Participants outside of the U.S. should dial 719-325-4856. The passcode for the call is 4948763.