Arno Therapeutics closes private placement to advance cancer treatment

Arno Therapeutics, Inc., a clinical-stage biopharmaceutical company focused on developing oncology therapeutics, today announced that it has closed a private placement of its securities resulting in gross proceeds to the company of over $15 million. The financing included both new and existing investors and was lead by UTA Capital, LLC and Pontifax Funds. Riverbank Capital Inc., a FINRA member broker dealer, acted as placement agent.

“We are extremely pleased to have the continued support of the investment community as we work to advance our promising technologies for the treatment of cancer”

"We are extremely pleased to have the continued support of the investment community as we work to advance our promising technologies for the treatment of cancer," said Arie Belldegrun, M.D., FCAS, Chairman of Arno. "We believe these funds will provide us with sufficient capital to complete our on-going clinical trials and generate meaningful clinical data."

The net proceeds of the financing will be used to advance Arno's three clinical stage compounds:

• AR-12, is a potentially first-in-class, orally available PDK1 inhibitor that blocks the PI3K/Akt pathway and may also cause cell death through the induction of endoplasmic reticulum stress. AR-12 is currently being studied in a multi-centered Phase I clinical trial in adult patients with advanced or recurrent solid tumors or lymphoma.
• AR-67, is a novel, third-generation camptothecin analogue that inhibits Topoisomerase I activity. AR-67 has demonstrated activity and an excellent safety profile in clinical studies as well as improved pharmacokinetic properties when compared to approved second-generation products Hycamtin^® (topotecan) and Camptosar^® (irinotecan). AR-67 is currently enrolling patients in Phase II clinical studies in glioblastoma multiforme (GBM) and myelodysplastic syndrome (MDS).
• AR-42 is an orally available, broad spectrum inhibitor of both histone and non-histone deacetylation proteins (a "pan-DAC"). AR-42 is currently being studied in an investigator sponsored Phase I/IIa clinical study in adult patients with relapsed or refractory multiple myeloma (MM), chronic lymphocytic leukemia (CLL) or lymphoma. In preclinical studies, AR-42 has compared favorably to vorinostat ("SAHA," or Zolinza^®) and other deacetylase inhibitors. These data demonstrate the potent and differentiating activity of AR-42. Additionally, pre-clinical findings presented at the 2009 American Society of Hematology (ASH) Annual Meeting and Exposition showed that AR-42 potently and selectively inhibits leukemic stem cells in acute myeloid leukemia (AML).

Under the terms of a Securities Purchase and Registration Rights Agreement, Arno sold units consisting of an aggregate of approximately 15.1 million shares of Series A Convertible Preferred Stock (the "Preferred Stock") and warrants to purchase up approximately 7.6 million additional shares of the Preferred Stock. Each unit was sold at a price equal to $1.00 per unit. Warrants to purchase approximately 1.2M shares of Preferred Stock are exercisable for two and one half years at a price per share equal to $1.00, and warrants to purchase approximately 6.4M shares of Preferred Stock are exercisable for five years at a price per share equal to $1.15. Arno has agreed to file a registration statement covering the resale of the shares of common stock issuable upon conversion of the Preferred Stock issued in the private placement, including the shares issuable upon exercise of the warrants. Upon the effectiveness of the registration statement all shares of Preferred Stock shall automatically convert into shares of common stock of the Company, and the warrants to purchase Preferred Stock shall thereafter convert to warrants to purchase shares of common stock.

The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration under such act and applicable state securities laws or an applicable exemption from those registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.