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Arrowhead Research Corporation (NASDAQ: ARWR) today announced financial results for its second fiscal quarter ended March 31, 2009.
SECOND FISCAL QUARTER 2009 AND RECENT BUSINESS HIGHLIGHTS:
· Business highlights:
o Majority-owned Unidym, Inc. ("Unidym") agreed to partner its bulk materials business with Continental Carbon Company, a global leader in carbon blacks, conductive blacks and carbon nanotubes, includes potential earnout of $26.5 million based on sales.
o Unidym entered into a joint development agreement with a leading global electronics manufacturer. With this partnership, Unidym is now working with two of the leading global manufacturers of LCDs to incorporate its CNT films into their display devices.
o Arrowhead increased ownership in Unidym to 57.6% from 51.5% through non-cash purchases of Unidym Series A Preferred Stock.
o Majority-owned Calando Pharmaceuticals presented in abstract form final IT-101 phase I results demonstrating safety at the April American Association for Cancer Research meeting.
o Minority-owned Nanotope demonstrated cartilage regeneration in an animal model using its self-assembling, bioactive nanofiber technology.
· Financial highlights:
o Unidym's cash burn was reduced from $1.2 million per month in summer of 2008 to less than $400,000 per month currently, further reductions are achievable.
o Consolidated operating expenses declined 28% quarter-over-quarter as ongoing cost reduction initiatives began to take effect. Cash burn declined 31% quarter-over-quarter and 42% compared to the first quarter of fiscal 2009.
"Our second quarter performance reflects ongoing success in revising our business strategy to increase efficiency and extend capital resources while remaining focused on near-term commercialization opportunities," stated Dr. Christopher Anzalone, Arrowhead's President and CEO. "I am pleased to report that we are beginning to see the benefits of our restructuring, as evidenced by the substantial decrease in cash burn. We anticipate continued cost savings and additional partnerships in the second half of the fiscal year as our current efforts to bear fruit."
Dr. Anzalone continued, "As part of our restructuring, we increased our focus on near-term revenue opportunities, principally via an expansion of our technology licensing and partnering model. Subsequent to the close of the quarter, we announced a partnership between Unidym and Continental Carbon Company intended to allow Unidym to monetize its bulk materials business and reduce costs while still ensuring a ready supply of carbon nanotubes to Unidym's target markets. Concurrently, Unidym announced a partnership with a second global electronics manufacturer. With this most recent announcement, Unidym is now partnered with two leading global manufacturers of LCDs to incorporate its CNT films into their display devices."
Dr. Anzalone concluded, "We believe the progress made since the beginning of the calendar year allows us to continue to pursue large market opportunities. We continue to focus on near-term value creation via additional partnerships and commercial opportunities while exercising the fiscal discipline required in the current recessionary environment."
SELECTED SECOND QUARTER FISCAL 2009 FINANCIAL RESULTS
For the second quarter of fiscal 2009 ended March 31, 2009, Arrowhead reported revenues of $0.2 million, compared with $0.7 million in the same period in the prior year. GAAP consolidated net loss was ($5.3 million), or ($0.12) per undiluted share for the second quarter of fiscal 2009, compared with a loss of ($5.7 million), or ($0.15) per undiluted share in the second quarter of fiscal 2008.
For the six months ended March 31, 2009, Arrowhead reported revenues of $0.9 million, compared with $1.1 million for the six months ended March 31, 2008. GAAP consolidated net loss was ($13.3 million), or ($0.31) per undiluted share for the six months ended March 31, 2009, compared with a loss of ($11.0 million), or ($0.28) per undiluted share in the same period in the prior year.
The Company's operational use of cash for the six months ended March 31, 2009 was $11.4 million, compared to $11.5 million in the year-ago period. Arrowhead's consolidated cash flows include approximately $2.5 million raised from outside investors through a note offering by Calando and the sale of $2 million of newly issued Unidym C-1 shares to TEL Ventures. Additionally, Unidym realized a $0.7 million gain through the sale of its equity interest in Ensysce BioSciences, Inc.
Conference Call Dial-in Details
The Company will conduct a financial announcement conference call today, Friday, May 15, 2009, at 9:00 A.M. ET/6:00 A.M. PT to discuss the Company's results. To participate in the conference call, please dial 888-846-5003 or 480-629-9856. Investors may also access a live audio web cast of this conference call on the Company's website at www.arrowheadresearch.com.
A replay of the webcast will be available two hours after the conclusion of the call and will be available for 90 calendar days. An audio replay will also be available approximately two hours after the conclusion of the call and will be made available until Friday, May 22, 2009. The audio replay can be accessed by dialing 800-406-7325 or 303-590-3030 and entering access ID number 4070939#.
About Arrowhead Research Corporation
Arrowhead Research Corporation (www.arrowheadresearch.com) (NASDAQ: ARWR) is a nanotechnology company commercializing new technologies in the areas of life sciences, electronics, and energy. Arrowhead is seeking to build value for shareholders through the progress of majority owned subsidiaries. Currently, Arrowhead has four subsidiaries commercializing nanotech products and applications and minority investments in two privately held nanobiotech companies.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This news release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including the future success of our scientific studies, our ability to successfully develop products, rapid technological change in our markets, changes in demand for our future products, legislative, regulatory and competitive developments, the financial resources available to us, and general economic conditions. There can be no assurance that Arrowhead or its subsidiaries will be able to sustain operations for expected periods or that any of these entities will be successful in obtaining additional funding needed to sustain operations. Arrowhead Research Corporation's Annual Report on Form 10-K and 10-K/A, recent and forthcoming Quarterly Reports on Form 10-Q and 10-Q/A, recent Current Reports on Forms 8-K and 8-K/A, our Registration Statements on Form S-3, and other SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We disclaim any intent to revise or update publicly any forward-looking statements for any reason.
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Sanjay M. Hurry
The Piacente Group, Inc.
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