Ariad Reports Fourth Quarter and Year-End 2003 Results; Highlights AP23573 Product Development Progress and Plans.Business Editors/Health/Medical Writers BIOWIRE2K CAMBRIDGE, Mass.--(BUSINESS WIRE)--Feb. 3, 2004 ARIAD ARIAD Allison Research Index of Art and Design Pharmaceuticals, Inc. (Nasdaq: ARIA) today announced results for the fourth quarter and the year ended December 31, 2003 and highlighted product development progress and plans for its lead cancer product candidate, AP23573. Financial Highlights For the year ended December 31, 2003, the Company reported a net loss of $19.7 million, or $0.51 per share, as compared to $27.8 million, or $0.86 per share, for the year ended December 31, 2002. For the quarter ended December 31, 2003, the Company reported a net loss of $5.7 million, or $0.13 per share, compared to a net loss of $6.8 million, or $0.20 per share, for the same period in 2002. The decreases in net loss for the full year and quarter are due primarily to lower R&D expenses resulting from the Company's focus on the development of its most-promising small-molecule cancer product candidates. During the fourth quarter, the Company raised gross proceeds of $50.3 million through the sale of 7,613,488 shares of its common stock in two direct equity placements to institutional investors through Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. and Rodman & Renshaw. At December 31, 2003, the Company reported $66.7 million in cash, cash equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has , compared with $26.9 million at December 31, 2002. "With our successful financings last quarter, we plan to aggressively pursue our most-promising near-term oncology opportunity, our mTOR inhibitor to treat solid tumors and other malignancies. Our most important corporate objective for 2004 is the expansion of clinical trials for AP23573 into multiple cancer indications at multiple centers, including phase 2 studies, by second quarter," said Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. "We intend to continue careful management of our costs, anticipating cash used in operations for the year 2004 of approximately $29 million, largely driven by the expanded clinical development program for AP23573." AP23573 Product Development Highlights During the second quarter, the Company began enrollment at major cancer centers of patients with recurrent, advanced, or refractory cancer refractory cancer Oncology Cancer that is unresponsive to treatment. See Radioinsensitive. in two phase 1 clinical studies of AP23573. The cancers being studied include various solid tumors and blood malignancies. Clinical assessment includes safety and pharmacokinetics, role of molecular and genetic markers and anti-cancer activity. In May at the annual meeting of the American Society of Clinical Oncology American Society of Clinical Oncology, or ASCO, is an organization that represents all clinical oncologists. Every year, ASCO holds a large symposium where physicians and researchers meet to convey and discuss research and ideas. , the Company reported AP23573 to be highly effective in animal models of human solid tumors. Treatment initiated in early-stage tumor growth induced persistent tumor regression of up to 90%, and treatment at a later more-aggressive stage still produced significant reductions in the rate of growth of all six tumor types studied (i.e., brain, prostate, breast, pancreas, lung, and colon cancers). The report also supports the use of AP23573 in multi-drug regimens that can be tailored to treat specific cancers. In November at the Society for Neuro-Oncology meeting, low doses of AP23573 were shown to reduce by 40% the growth of brain tumor Brain Tumor Definition A brain tumor is an abnormal growth of tissue in the brain. Unlike other tumors, brain tumors spread by local extension and rarely metastasize (spread) outside the brain. cells, known as glioblastoma glioblastoma /glio·blas·to·ma/ (gli?o-blas-to´mah) any malignant astrocytoma. glioblastoma multifor´me . The potency and anti-tumor activity of AP23573 were even more striking, because the reduction of tumor cell growth was achieved in brain cancer cells cells once believed to be peculiar to cancers, but now know to be epithelial cells differing in no respect from those found elsewhere in the body, and distinguished only by peculiarity of location and grouping. See also: Cancer over-expressing the Epidermal Growth Factor Epidermal growth factor or EGF is a growth factor that plays an important role in the regulation of cell growth, proliferation and differentiation. Human EGF is a 6045 Da protein with 53 amino acid residues and three intramolecular disulfide bonds. (EGF EGF abbr. epidermal growth factor ) receptor - a known marker of tumor aggressiveness - as well as in brain cancer cells without EGF receptor over-expression, suggesting broad applicability for treating these tumors. Later that month at the International Conference on Molecular Targets and Cancer Therapeutics jointly sponsored by the American Association for Cancer Research Wikipedia is not the place for advertisement or self-advertising. The American Association for Cancer Research (AACR) is an organization based in Philadelphia, Pennsylvania, that focuses on all aspects of cancer research including basic, clinical and translational , the National Cancer Institute, and the European Organization for Research and Treatment of Cancer, the Company reported that AP23573 blocks the process that controls tumor blood supply. This highly beneficial anti-angiogenesis effect of AP23573 is due to blockage blockage of intestine, urethra, etc. See obstruction under anatomical location, e.g. intestinal, urethral. blockage Wax, see there of growth factor pathways activated by Vascular Endothelial Growth Factor Vascular endothelial growth factor (VEGF) is an important signaling protein involved in both vasculogenesis (the de novo formation of the embryonic circulatory system) and angiogenesis (the growth of blood vessels from pre-existing vasculature). (VEGF VEGF vascular endothelial growth factor. ) in tumors and surrounding tissues. Combined with what had been previously shown, the activity of the AP23573 class of drugs is now known to include starvation of cancer cells and shrinkage of tumors by inhibiting the critical cell-signaling protein mTOR, which regulates the response of tumor cells to nutrients and growth factors and controls tumor blood supply through effects on VEGF. Upcoming Scientific Presentations Important progress in the development of ARIAD's product candidates will be highlighted at the following oncology meetings in the first quarter of 2004: 1. Protein Kinases and Cancer: The Promise of Molecular-Based Therapies (February 24-29, 2004) 2. American Association for Cancer Research Annual Meeting (March 27-31, 2004) ARIAD is engaged in the discovery and development of breakthrough medicines that regulate cell signaling Cell signaling is part of a complex system of communication that governs basic cellular activities and coordinates cell actions. The ability of cells to perceive and correctly respond to their microenvironment is the basis of development, tissue repair, and immunity as well as with small molecules. The Company is developing a comprehensive approach to the treatment of cancer and is primarily focused on a series of product candidates for targeted oncology indications. ARIAD also has an exclusive license to pioneering technology and patents related to the discovery, development and use of drugs that regulate NF-(kappa Kappa Used in regression analysis, Kappa represents the ratio of the dollar price change in the price of an option to a 1% change in the expected price volatility. Notes: Remember, the price of the option increases simultaneously with the volatility. )B cell-signaling activity, which has been implicated im·pli·cate tr.v. im·pli·cat·ed, im·pli·cat·ing, im·pli·cates 1. To involve or connect intimately or incriminatingly: evidence that implicates others in the plot. 2. in many major diseases. Additional information about ARIAD can be found on the web at http://www.ariad.com. Gleevec is a trademark of Novartis AG Novartis AG Swiss pharmaceutical company. It was formed through the 1996 merger of two Swiss firms: Ciba (see Ciba-Geigy) and Sandoz, a chemical company with interests in pharmaceuticals, nutrition, and agriculture. . Some of the matters discussed herein are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements are identified by the use of words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance and include statements regarding the anticipated timing, scope, and progress of clinical trials for our product candidates, the timing of IND filings, if any, and the projected cash used in operations for 2004. Such statements are based on management's current expectations and are subject to certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially from those expressed or implied by such forward-looking statements. These risks include, but are not limited to, risks and uncertainties regarding the Company's ability to conduct preclinical and clinical studies of its product candidates and the results of such studies, regulatory oversight, intellectual property claims, the timing, scope, cost and outcome of legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. , future capital needs, key employees, dependence on the Company's collaborators and manufacturers, markets, economic conditions, products, services, prices, reimbursement rates, competition and other risks detailed in the Company's public filings with the Securities and Exchange Commission, including ARIAD's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2002. The information contained in this document is believed to be current as of the date of original issue. The Company does not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in the Company's expectations, except as required by law.
ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except
share and per share Three Months Ended Twelve Months Ended
data December 31, December 31,
2003 2002 2003 2002
(Unaudited)
Total license revenue $ 191 $ 42 $ 660 $ 67
Operating expenses:
Research and
development 3,850 5,376 14,889 23,018
General and
administrative 2,133 1,506 5,547 5,718
Total operating
expenses 5,983 6,882 20,436 28,736
Other income
(expense), net 81 26 50 826
Net loss $ (5,711) $ (6,814) $(19,726) $(27,843)
Net loss per common
share
(basic and diluted) $ (.13) $ (.20) $ (.51) $ (.86)
Weighted average
number of shares
of common stock
outstanding (basic
and diluted) 45,417,428 33,744,085 39,036,073 32,475,083
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
December 31, December 31,
In thousands 2003 2002
Cash, cash equivalents and marketable
securities $ 66,740 $ 26,850
Total assets $ 74,284 $ 35,104
Working capital $ 61,528 $ 21,172
Total liabilities $ 15,017 $ 13,252
Stockholders' equity $ 59,326 $ 21,852
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