ARIAD Reports First Quarter 2010 Financial Results and Development Progress

Mon May 10, 2010 4:05pm EDT

* Reuters is not responsible for the content in this press release.

http://www.businesswire.com/news/home/20100510006954/en

CAMBRIDGE, Mass.--(Business Wire)--
ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) today reported financial results for
the three-month period ended March 31, 2010 and provided an update on corporate
developments. 

"We have had a productive start to the year with substantial progress advancing
each of our internally discovered drug candidates and the successful completion
of our revised agreement with Merck on the development, manufacture and
commercialization of ridaforolimus, our investigational mTOR inhibitor," stated
Harvey J. Berger, M.D. chairman and chief executive officer of ARIAD. "We expect
several key business and clinical catalysts during the remainder of 2010, each
one with the potential to create significant value for our shareholders." 

Financial Highlights

For the three months ended March 31, 2010, the Company reported a net loss of
$23.4 million, or $0.21 per share, compared to a net loss of $20.2 million, or
$0.26 per share, for the corresponding period in 2009. This net loss in 2010
includes a $6.1 million non-cash charge related to the revaluation of the
Company`s warrant liability as compared to a charge of $215,000 in the
corresponding period in 2009. This increased charge was offset in part by a
decrease of $2.9 million in research and development expenses in the three-month
period ended March 31, 2010 as compared to the corresponding period in 2009, due
to completion of patient enrollment in 2009 in several clinical trials of
ridaforolimus, including the Phase 3 SUCCEED trial in patients with advanced
bone and soft-tissue sarcomas, and completion of certain manufacturing and
non-clinical initiatives for our lead product candidates. 

For the three-month period ended March 31, 2010, cash used in operations was
$14.3 million, compared to cash used in operations of $10.1 million for the
corresponding period in 2009. The Company ended the first quarter with cash and
cash equivalents of $25.4 million, compared to $40.4 million at December 31,
2009. 

These financial results do not take into account the positive impact of the
restructured collaboration agreement with Merck Sharpe & Dohme Corp. ("Merck")
entered into earlier this month. This license agreement provides ARIAD with an
initial up-front payment of $50 million, reimbursement of ARIAD`s costs for
ridaforolimus since the start of the year, estimated by ARIAD to be
approximately $19 million through April 2010, and funding by Merck of 100
percent of ridaforolimus costs going forward, including ARIAD`s transition
costs. 

The agreement also includes up to $514 million in potential regulatory and sales
milestones for the successful development and commercialization of ridaforolimus
in multiple indications, as well as tiered, double-digit royalties on global net
sales of ridaforolimus. These royalties are approximately one-third greater that
those that ARIAD would have received just for ex-U.S. sales at each of the sales
tiers in the original agreement. The impact of this agreement will be reflected
in ARIAD`s financial statements beginning with the second quarter of this year. 

"The revised agreement with Merck allows us to refocus our resources on our
other product candidates in development and retain the potential commercial
value of ridaforolimus through substantial royalties and milestones," said
Edward M. Fitzgerald, senior vice president and chief financial officer of
ARIAD. 

Financial Guidance for 2010

ARIAD anticipates positive cash flow from operations for 2010 in the range of $5
million to $7 million, reflecting the impact of the $50 million up-front payment
from Merck. ARIAD also estimates year-end cash and cash equivalents in the range
of $44 million to $46 million. 

Not taking into account any future milestone payments from Merck, any additional
partnering or licensing activities, or other revenues, ARIAD believes that its
cash and cash equivalents, together with the near-term payments to be received
from Merck, are sufficient to fund its operations into the second half of 2011. 

Progress in the Clinic

ARIAD continued to make solid progress in its development programs during the
first quarter of 2010, including:

* Continuing patient enrollment and treatment in the Phase 1 clinical trial of
AP24534, ARIAD`s investigational pan-BCR-ABL inhibitor with broad potential in
patients with treatment-resistant chronic myeloid leukemia (CML). ARIAD is
currently in discussions with U.S. and European regulatory authorities on the
design of a pivotal trial of AP24534 in patients with resistant and refractory
CML or Philadelphia-chromosome positive (Ph+) acute lymphoblastic leukemia and
ARIAD expects to initiate this trial in the second half of 2010. 
* Reaching two-thirds of the progression-free survival (PFS) events in the Phase
3 SUCCEED trial of oral ridaforolimus in patients with advanced soft-tissue and
bone sarcomas, thereby triggering initiation of the study`s second interim
efficacy analysis. The independent Data Monitoring Committee of the SUCCEED
trial is expected to complete this analysis in the second quarter of 2010. The
final analysis of the PFS data is expected later this year. 
* Presentation of preclinical data on ARIAD`s investigational anaplastic
lymphoma kinase (ALK) inhibitor, AP26113, that demonstrate potent inhibition of
the target protein and of mutant forms resistant to the first-generation ALK
inhibitor, which currently is in clinical trials in patients with cancer. ARIAD
is advancing AP26113 towards clinical development.

Update on Patent Litigation

ARIAD and its co-plaintiffs announced in the first quarter of 2010 that the U.S.
Court of Appeals for the Federal Circuit (the "Federal Circuit") ruled in favor
of Eli Lilly & Co. ("Lilly") following the en banc rehearing that was held in
December 2009. The rehearing concerned a 2007 judgment that held Lilly liable
for infringement of four claims of U.S. Patent No. 6,410,516. The Federal
Circuit held that the four patent claims are invalid due to inadequate written
description. ARIAD and its co-plaintiffs have decided to not pursue further
appeal of the Federal Circuit decision. 

Upcoming Medical Meeting

Investigators will present additional safety and clinical proof-of-concept data
from the ongoing Phase 1 clinical trial of AP24534 in patients with advanced
blood cancers and initial clinical data from the ongoing Phase 1 trial of
ridaforolimus in combination with dalotuzumab at the Annual Meeting of the
American Society of Clinical Oncology taking place June 4 to 8, 2010 in Chicago,
Illinois. 

Upcoming Investor Meeting

ARIAD management will be making corporate presentations at the following
investor conferences:

* Brean Murray, Carret & Co. 2010 Life Sciences Summit, New York, NY, May 17,
2010. 
* Jefferies 2010 Global Life Sciences Conference, New York, New York, June 10,
2010.

Today`s Conference Call at 5 p.m.

ARIAD will hold a live webcast of its quarterly and year-end earnings conference
call today, May 10, 2010 at 5:00 p.m. (ET). The live webcast can be accessed by
visiting the investor relations section of the Company`s website at
http://investor.ariad.com. The call can be accessed by dialing 866-543-6407
(domestic) or 617-213-8898 (international) five minutes prior to the start time
and providing the pass code 37403650. A replay of the call will be available on
the ARIAD website approximately two hours after completion of the call and will
be archived for three weeks. 

About ARIAD

ARIAD`s vision is to transform the lives of cancer patients with breakthrough
medicines. The Company`s mission is to discover, develop and commercialize
small-molecule drugs to treat cancer in patients with the greatest and most
urgent unmet medical need - aggressive cancers where current therapies are
inadequate. ARIAD`s lead product candidate, ridaforolimus, is an investigational
mTOR inhibitor being developed by Merck Sharpe & Dohme Corp. and is in Phase 3
clinical development in patients with advanced sarcomas. ARIAD`s second
internally discovered product candidate, AP24534, is an investigational
pan-BCR-ABL inhibitor completing Phase 1 clinical development in patients with
hematological cancers, notably chronic myeloid leukemia. For additional
information about the Company, please visit http://www.ariad.com. 

This press release contains "forward-looking statements" including, but not
limited to, statements relating to the amount of expenses to be reimbursed by
Merck, payments to be made by Merck at a future date, the potential receipt of
additional regulatory and sales milestone payments under this revised
collaboration agreement, the potential of the successful development and
commercialization of ridaforolimus in multiple indications, the future costs of
the ridaforolimus program, the opportunity to receive royalties on global net
sales of ridaforolimus, the potential to advance AP24534 into a pivotal
registration trial in patients with CML and the expected timing for finalizing
dose selection and initiation of such a trial, and opportunities to secure
additional sources of funding and other statements made under the captions
"Financial Highlights and Financial Guidance for 2010." Forward-looking
statements are based on management`s 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 statements. These risks and uncertainties include, but are not
limited to, the potential that ridaforolimus may not be granted regulatory
approval for any indication in any country, that ridaforolimus may not achieve
any particular levels of revenue in the future, that preclinical data and
early-stage clinical data may not be replicated in later-stage clinical studies,
the costs associated with research, development, manufacturing and other
activities, the conduct, timing and results of pre-clinical and clinical studies
of the Company`s product candidates, the adequacy of capital resources and the
availability of additional funding, and other factors detailed in the Company`s
public filings with the U.S. Securities and Exchange Commission. The information
contained in this press release 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 data       Three Months Ended                                        
                                                     March 31,                                                 
                                                     2010                                 2009            
                                                     (Unaudited)                          (Unaudited)     
 License and collaboration revenue                $  2,154                          $     1,900           
 Operating expenses:                                                                                      
 Research and development                            14,835                               17,749          
 General and administrative                          4,574                                4,126           
 Total operating expenses                            19,409                               21,875          
 Other income (expense), net                         (6,143       )                       (259         )  
 Net loss                                         $  (23,398      )                 $     (20,234      )  
 Net loss per common share                        $  (.21         )                 $     (.26         )  
                                                                                                          
 Weighted average number of shares of                109,016,202                          77,237,551      
 
                                                                                                        
 common stock outstanding                                                                                 
                                                                                                          
                                                                                                          


 CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION                                                        
                                                                                                
 In thousands                                           March 31,              December 31,     
                                                        2010                   2009             
                                                        (Unaudited)                             
 Cash, cash equivalents and marketable securities    $  25,442              $  40,362           
 Total assets                                        $  50,431              $  65,010           
 Deferred revenue, total                             $  109,457             $  111,611          
 Total liabilities                                   $  161,182             $  154,026          
 Stockholders` deficit                               $  (110,751     )      $  (89,016       )  
                                                                                                
                                                                                                


 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS INFORMATION                                                               
                                                                                                                      
 In thousands                                               Three Months Ended                                        
                                                            March 31,                                                 
                                                            2010                                 2009            
                                                            (Unaudited)                          (Unaudited)     
 Net cash used in operating activities                   $  (14,327      )                 $     (10,110      )  
 Net cash provided by (used in) investing activities        (342         )                       5,817           
 Net cash provided by (used in) financing activities        (251         )                       22,591          
                                                                                                                 
 Net increase (decrease) in cash and cash equivalents    $  (14,920      )                 $     18,298          


ARIAD Pharmaceuticals
Maria E. Cantor, 617-621-2208 

Copyright Business Wire 2010

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