ARYx third quarter net loss decreases from $8.2 million to $2.5 million

ARYx Therapeutics, Inc. (NASDAQ:ARYX) today provided an update on its business operations and released its financial results for the third quarter of 2010.

Company Highlights

• ARYx continued to pursue a strategic transaction to optimize the value of its assets to its stockholders.
• ARYx secured bridge financing in two related loan transactions - a bridge loan financing with existing investors MPM Capital and Ayer Capital Management, L.L.P., and the concurrent restructuring of its outstanding loans with Lighthouse Capital Partners V, L.P. Under the terms of the bridge loan financing, ARYx borrowed an aggregate principal amount of $4.0 million, and issued warrants to purchase up to 2,000,000 shares of ARYx's common stock to the investors in the financing, subject to certain terms and conditions. Concurrently with the bridge loan financing, ARYx's existing loan arrangement with Lighthouse was amended to provide for the refinancing of approximately $2.3 million of loan payments initially scheduled for the third quarter of 2010.
• ARYx was awarded a grant totaling $943,900 under the Federal Qualifying Therapeutic Discovery Project ("QTDP") program to which ARYx had applied in July 2010. The U.S. Congress established the QTDP program as part of the Patient Protection and Affordable Care Act of 2010. As described by the U.S. Congress, preference was given to projects that showed the greatest potential to create and sustain high-quality, high-paying jobs in the U.S. and advance the country's competitiveness in the fields of life, biological and medical sciences.

Third Quarter Results of Operations

For the third quarter of 2010, ARYx reported a net loss of $2.5 million or $0.08 per share, compared to a net loss of $8.2 million or $0.30 cents per share in the same quarter of 2009. As of September 30, 2010, ARYx had cash, cash equivalents and marketable securities totaling approximately $3.0 million.

Research and development expense for the third quarter of 2010 was $0.8 million, compared to $5.0 million during the same quarter of 2009. The significant decrease in expense in 2010 was primarily due to substantial completion of the Phase 2/3 clinical study of tecarfarin in 2009 and a reduction in personnel and administrative costs following the company's restructuring of its operations in October 2009 and February 2010.

ARYx's general and administrative expense during the third quarter of 2010 was $1.3 million compared with $2.6 million for the same quarter of 2009. The decrease in expense as compared to the previous year was primarily due to savings realized from the company's restructuring of its operations in October 2009 and February 2010.