Ardea Biosciences reports lower net loss of $10.1M for first-quarter 2010

May 7 2010

Ardea Biosciences, Inc. (Nasdaq: RDEA) a biotechnology company focused on the development of small-molecule therapeutics for the treatment of gout, cancer and human immunodeficiency virus (HIV), reported recent accomplishments and financial results for the first quarter ended March 31, 2010.

"We are pleased to have accomplished a number of very important objectives since our last quarterly update," commented Barry D. Quart, PharmD, president and chief executive officer of Ardea. "In March, we announced positive, preliminary top-line results from our completed Phase 2b monotherapy study of RDEA594 and, shortly thereafter, we were able to significantly strengthen our financial position by completing a $77 million public financing. These important achievements position us well for our next major objectives of obtaining regulatory approval of our Phase 3 plan, and initiating the Phase 3 development program for RDEA594."

Recent Accomplishments

• In April 2010, we announced the appointment of Stephen R. Davis as Executive Vice President and Chief Operating Officer.
• Also in April 2010, we completed a public offering of 4,025,000 shares of our common stock, including 525,000 shares sold pursuant to the full exercise of an overallotment option granted to the underwriters.  Net proceeds from the sale of the shares, before expenses and after deducting underwriting discounts and commissions, were approximately $77.1 million.
• In March 2010, we announced positive, preliminary, top-line results from a Phase 2b monotherapy study of RDEA594, our lead product candidate for the treatment of hyperuricemia and gout.  In this study in 123 gout patients with hyperuricemia, reductions in serum urate and increased response rates occurred in a dose-related manner and were statistically significant and clinically meaningful at the two highest doses tested.  At the highest dose, there was a 38 percent reduction in serum urate and a 45 percent response rate after the 4-week treatment period.  Patients in the study who started the trial with serum urate levels of less than 10 mg/dL demonstrated a 58 percent response rate at the highest dose.  Industry sources indicate that patients with serum urate levels less than 10 mg/dL represent a large majority of the gout patient population.  Response was defined as the percentage of patients achieving serum urate levels of less than 6 mg/dL at the end of the treatment period. RDEA594 was also well tolerated in this study.  

Clinical Development Efforts and Important Upcoming Clinical Development Milestones

• We will present additional data from our completed Phase 2b, monotherapy study of RDEA594, data on our next-generation URAT1 inhibitor program and additional data from our Phase 1 combination study of RDEA594 and febuxostat (Uloric®, Takeda Pharmaceutical Company Limited; Adenuric®, Ipsen and Menarini) on June 18th and 19th at the Annual European Congress of Rheumatology hosted by the European League Against Rheumatism (EULAR) in Rome, Italy.  Also in the second quarter of 2010, we expect to provide additional data from studies of RDEA594 in subjects with renal impairment.
• Based on the excellent tolerability and activity of the 600 mg dose of RDEA594 in the Phase 2b monotherapy study, we are adding this dose and increasing the number of patients in our Phase 2b allopurinol combination study; we expect to announce complete results from this study in the third quarter of 2010.  
• We expect to obtain guidance from the United States Food and Drug Administration and European Medicines Agency with respect to the RDEA594 Phase 3 development program in the second half of 2010.
• In coordination with our commercial partner, Bayer HealthCare AG (Bayer), we intend to continue to progress RDEA119 in advanced cancer patients with different tumor types, as a single agent in the ongoing Phase 1 study as well as in combination with sorafenib (Nexavar®, Bayer HealthCare, Onyx Pharmaceuticals, Inc.) in the ongoing Phase 1/2 study.

First Quarter 2010 Financial Results

As of March 31, 2010, we had $38.2 million in cash, cash equivalents, and short-term investments, and $1.4 million in receivables, compared to $50.9 million in cash, cash equivalents, and short-term investments, and $1.4 million in receivables as of December 31, 2009.  The net decrease in cash, cash equivalents, short-term investments and receivables for the first quarter of 2010 was primarily due to the use of cash to fund our clinical-stage programs, personnel costs and for other general corporate purposes, partially offset by the reimbursement of third-party development costs associated with our MEK inhibitor program under our license agreement with Bayer.  

In April 2010, we completed a public offering of 4,025,000 shares of our common stock, which resulted in net proceeds to us of approximately $77.1 million and increased our balance of cash, cash equivalents, and short-term investments to approximately $115 million.  We believe that under our current business plan our cash, cash equivalents, and short-term investments are sufficient to satisfy our currently projected funding requirements through the completion of our planned Phase 3 program for RDEA594.

Revenues totaled $3.3 million for the three months ended March 31, 2010.  There were no revenues for the same period in 2009.  The revenues earned during 2010 resulted from the recognition of a portion of the upfront, non-refundable license fee and reimbursement of third-party development costs under our license agreement with Bayer.  

Net loss for the three months ended March 31, 2010 was $10.1 million or $0.54 per share, compared to a net loss for the same periods in 2009 of $14.1 million or $0.79 per share.  Net loss for the three months ended March 31, 2010 included non-cash charges of $1.6 million or $0.09 per share for stock-based compensation expense.  For the same period in 2009, we reported non-cash charges of $1.5 million or $0.09 per share for stock-based compensation expense.  The decrease in net loss between these periods was primarily a result of the increase in revenues noted above for the same period and a decrease in operating expenses, mainly due to savings realized from our 2009 restructuring plan.