Third quarter 2009 financial results announced by Aradigm

Aradigm Corporation (OTCBB:ARDM) (the “Company”) today announced financial results for the third quarter and nine months ended September 30, 2009 and recent highlights.

Revenue for the third quarter of 2009 was $4.9 million, compared to revenue of $0.2 million for the third quarter of 2008. The bridging study fee, milestone payment and research and development reimbursements received in connection with the collaboration with Lung Rx, Inc. (“Lung Rx”) for the development of inhaled treprostinil in the AERx® delivery system which had previously been recorded as deferred revenue were recognized in the third quarter upon termination of the collaboration by Lung Rx.

Total operating expenses for the third quarter of 2009 were $5.4 million, compared to total operating expenses of $4.8 million for the third quarter of 2008. The increase in operating expenses resulted from the Company recording, in accordance with generally accepted accounting principles, $1.6 million in asset impairment expense associated with the Lung Rx collaboration termination to reflect the idle state of AERx production fixed assets. The partially offsetting decrease in operating expenses was due to cost control efforts. The Company’s net loss for the third quarter of 2009 was $0.6 million, or $0.01 per share, compared to a net loss of $4.6 million, or $0.08 per share, for the third quarter of 2008.

As of September 30, 2009, cash, cash equivalents and short-term investments totaled $11.8 million.

Recent Highlights

• Final preparations for the initiation of the Phase 2b program to evaluate the Company’s once-daily inhaled liposomal ciprofloxacin administered via nebulizer in patients with non-cystic fibrosis bronchiectasis are progressing, with international regulatory, institutional review board and ethics committee approvals being completed and site initiation underway. This orphan drug condition is a chronic severe respiratory disease and there is currently no drug specifically approved for its treatment in the U.S.
• The Company will be entitled to a $4.0 million milestone payment upon initial U.S. commercialization by Zogenix, Inc. (“Zogenix”) of SUMAVEL* DosePro* needle-free delivery system, as well as royalty payments upon sales of DosePro products. Zogenix announced that it had completed a $51 million preferred stock financing, with the capital to be used to finance the January 2010 planned launch of SUMAVEL DosePro. Zogenix and its European partner, Desitin Pharmaceuticals, GmbH (“Desitin”), announced that Desitin has filed for European regulatory approval of SUMAVEL DosePro following the successful completion of a European pivotal bioequivalence trial.

“We are very pleased that the first product using the needle-free DosePro technology is now ready for commercialization in the U.S. by Zogenix and its partner, Astellas Pharma US, Inc. We are continuing in our efforts to seek new collaborations utilizing our AERx technology platform and to generate non-dilutive financing by monetizing our non-strategic assets, while focusing on the development of inhaled liposomal ciprofloxacin for the prevention and treatment of infections associated with severe respiratory diseases,” said Igor Gonda, the Company’s CEO and President.