Arrowhead third-quarter 2010 net loss decreases to $0.4 million

Aug 13 2010

Arrowhead Research Corporation (NASDAQ:ARWR) today announced financial results for its fiscal 2010 third quarter ended June 30, 2010.

"In the third quarter, we continued to advance our late-stage subsidiaries and build on the momentum we began early in the calendar year," said Christopher Anzalone, Arrowhead's CEO. "In-line with our expectations, Calando's first-in-class Phase I interim results continue to generate interface opportunities with potential partners. Also, Unidym secured additional joint development agreements with two large partners. With the completion of our successful $8.7 million financing, we have the capital to support the disciplined implementation of Calando's and Unidym's strategies and to invest in future initiatives designed to accelerate growth. We have already selected, for diligence and potential acquisition, an exciting technology that addresses the large, underserved obesity market opportunity. With these achievements, we are making important strategic advancements to build a robust and unique portfolio of nanomedicine companies."

THIRD QUARTER FISCAL 2010 AND RECENT COMPANY HIGHLIGHTS:

• Business highlights:
  • Arrowhead secured $8.7 million in financing through a registered direct offering of stock and warrants.
  • Arrowhead rejoined the Russell Microcap Index.
  • Presented interim data from majority-owned subsidiary Calando Pharmaceuticals, Inc.'s Phase I human trial of its anti-cancer siRNA therapeutic, CALAA-01, at the American Society for Clinical Oncology Annual (ASCO) Meeting.
  • Unidym entered joint development agreements with Tokyo Electron and Guardian Glass, two global companies developing products for the display industry.
  • Arrowhead signed an option agreement with The University of Texas MD Anderson Cancer Center to negotiate a license in a defined field to a class of compounds that is believed to kill fat tissue by specifically targeting the blood vessels that supply it.
  • Arrowhead added two world-class scientists to its Scientific Advisory Board, Nobel Prize winner Dr. Lee Hartwell and former FDA Commissioner Dr. Andrew von Eschenbach.
  • Leonardo Biosciences obtained $2.5 million in financing from the Texas Emerging Technology Fund and recruited Dr. Bruce Given as its Chief Executive Officer.
• Financial highlights:
  • Decreased consolidated quarterly operating expenses by 53% versus the prior year's quarter from $4.9 million to $2.3 million.
  • Decreased, on a consolidated basis, cash used in operating activities from $12.7 million in the first nine months of 2009 to $5.2 million in the first nine months of 2010.

SELECTED FISCAL 2010 THIRD QUARTER FINANCIAL RESULTS

For the quarter ended June 30, 2010, Arrowhead reported revenue of $134,000, compared with $2.6 million in the quarter ended June 30, 2009. The prior period revenue included $2.4 million related to revenue from a license agreement between Calando and Cerulean Pharma, Inc. which was not repeated in the current period. Revenue at Unidym was comparable to the prior period.

Total operating expenses for the quarter ended June 30, 2010 were $2.3 million, a decrease of $2.6 million from $4.9 million during the quarter ended June 30, 2009. The significant reduction in operating expenses was a result of measures undertaken by management during 2009 to streamline its businesses and better align its cost structure with its capital resources.

Net loss for the quarter ended June 30, 2010 was $0.4 million, or $0.01 per share based on 64.6 million weighted average shares outstanding. This compares with a net loss of $2.5 million, or $0.6 per share based on 43.4 million weighted average shares outstanding, for the quarter ended June 30, 2009. In addition to the change in revenue and operating expenses, a non-cash gain of $1.6 million was recorded as the change in value of a derivative liability.