Arno Therapeutics, Inc. (ARNI: OTCQB) | Arno Therapeutics Reports Second Quarter 2016 Financial and Business Update

OTC

Arno Therapeutics Reports Second Quarter 2016 Financial and Business Update

Aug 22, 2016

OTC Disclosure News Service

Arno Therapeutics, Inc. (OTCQB:ARNI), a clinical stage biopharmaceutical
company focused on the development of therapeutics for cancer and other
life threatening diseases, today announced financial results for the
quarter ended June 30, 2016 and provided an update on recent clinical
developments for its lead compound, onapristone.

Q2 2016 and Recent Highlights:

  • On August 15, 2016, Arno completed a private placement of its common
    stock and common stock purchase warrants that will result in gross
    proceeds to the Company of approximately $2.8 million.
  • Arno continued to enroll patients in the second stage of its Phase
    I/II trial of onapristone in men with advanced, castration-resistant
    prostate cancer (CRPC) who have failed treatment with abiraterone or
    enzalutamide. The Phase II portion of this study is actively
    recruiting and is designed to evaluate onapristone in combination with
    Zytiga® (abiraterone acetate) in patients with CRPC.

“We are making good progress with the enrollment into CRPC study. The
data review committee has agreed to enrollment at the higher onapristone
dose levels of the Phase II cohort and the US investigative sites are
being opened to enrollment,” said Alex Zukiwski, MD, Chief Executive
Officer of Arno Therapeutics. “More importantly, the recently completed
capital raise will allow us to continue the clinical development of our
lead product, onapristone, including enrollment in our ongoing phase 2
clinical trial in castrate resistant prostate cancer (CRPC). The Board
of Directors and the management team are very grateful for the continued
support shown by several of our existing investors who participated in
this financing.”

Second Quarter 2016 Financial Results

For the three months ended June 30, 2016, Arno reported net loss of $2.1
million, or $0.05 per share, which includes non-cash income of $1.1
million related to the decrease in derivative liability of common stock
warrants, and $1.0 million of non-cash stock based compensation expense.
Adjusting for these non-cash items, which resulted in an income of $0.1
million, the Company reported a net loss of approximately $2.2 million,
or $0.05 per share, on a non-GAAP basis. Adjusted second quarter 2015
net loss was approximately $3.0 million, or $0.15 per share, on a
non-GAAP basis, which includes the same non-cash adjustments as second
quarter 2016. On a GAAP basis, second quarter 2015 net loss was $3.4
million, or $0.17 per share.

The primary factors for the $0.8 million year-over-year improvement in
adjusted (non-GAAP) net loss in the second quarter of 2016 compared to
the second quarter of 2015 were reduced spending of $0.2 million on
onapristone’s pre-clinical and non-clinical research activities mostly
offset by costs associated with terminating onapristone’s Phase I/II
clinical trial evaluating onapristone in women with progesterone
receptor (PR) expressing tumors and lower compensation expense of $0.5
million.

For the six months ended June 30, 2016, Arno reported net loss of $5.9
million, or $0.15 per share, which includes non-cash income of $0.2
million related to the decrease in derivative liability of common stock
warrants, and $1.9 million of non-cash stock based compensation expense.
Adjusting for these non-cash items, which resulted in an expense of $1.7
million, the Company reported a net loss of approximately $4.2 million,
or $0.10 per share, on a non-GAAP basis. This compares to an adjusted
non-GAAP net loss for the first half of 2015 of approximately $5.9
million, or $0.29 per share, when considering the same non-cash
adjustments as for the first half 2016. On a GAAP basis, first half 2015
net loss was $6.8 million, or $0.33 per share.

The primary factors for the $1.7 million year-over-year improvement in
adjusted (non-GAAP) net loss in the first half of 2016 compared to the
first half of 2016 were reduced spending of $0.8 million on
onapristone’s pre-clinical and non-clinical research activities mostly
offset by costs associated with terminating onapristone’s Phase I/II
clinical trial evaluating onapristone in women with progesterone
receptor (PR) expressing tumors and lower compensation expense of $0.7
million.

Non-GAAP Measures

Arno believes it prepared its consolidated financial statements in
conformity with accounting principles generally accepted in the United
States of America (GAAP) and pursuant to accounting requirements of the
Securities and Exchange Commission. In an effort to provide investors
with additional information regarding Arno’s results and to provide a
meaningful period-over-period comparison of Arno’s financial
performance, the Company sometimes uses non-GAAP financial measures as
defined by the Securities and Exchange Commission. The differences
between the GAAP and non-GAAP financial measures are reconciled in
schedule below. In presenting comparable results, the Company discloses
non-GAAP financial measures when it believes such measures will be
useful to investors in evaluating Arno’s underlying business
performance. Management uses the non-GAAP financial measures to evaluate
Arno’s financial performance against internal budgets and targets. In
addition, management internally reviews Arno’s results excluding the
impact of certain items, as it believes that these non-GAAP financial
measures are useful for evaluating Arno’s core operating results and
facilitating comparison across reporting periods. Importantly, Arno
believes non-GAAP financial measures should be considered in addition
to, and not in lieu of, GAAP financial measures. Arno’s non-GAAP
financial measures may be different from non-GAAP financial measures
used by other companies.

About Onapristone

Onapristone has the potential to be the first approved anti-progestin
for oncology indications and provide chemotherapy-sparing treatment to
cancer patients who express a specific biomarker, as detected by a
companion diagnostic under development. Onapristone is an oral,
anti-progestin hormone blocker that has been shown in previous clinical
trials to have anti-tumor activity in patients with breast cancer.
Onapristone appears to have a unique ability to block the activation of
the progesterone receptor, which is believed to be a mechanism that may
inhibit the growth of breast, endometrial and other tumors. The
activated form of the progesterone receptor (APR) has the potential to
function as a biomarker of anti-progestin activity.

About Arno Therapeutics

Arno Therapeutics is a clinical stage biopharmaceutical company
developing innovative products for the treatment of cancer and other
life threatening diseases. Arno has exclusive worldwide rights to
develop and market three innovative anti-cancer product candidates.
These compounds are in clinical or preclinical development. For more
information about the company, please visit www.arnothera.com.

Forward-Looking Statements

This press release contains forward-looking statements that involve
substantial risks and uncertainties. These statements are often, but not
always, made through the use of words or phrases such as “anticipates,”
“expects,” “plans,” “believes,” “intends,” and similar words or phrases.
These forward-looking statements include, without limitation, statements
regarding the potential of onapristone as a treatment of CRPC,
statements regarding the timing, progress and anticipated results of the
clinical development of onapristone, as well as Arno’s strategy, future
operations, outlook, milestones, future financial position, future
financial results, plans and objectives. Arno may not actually achieve
these plans, intentions or expectations and Arno cautions investors not
to place undue reliance on our forward-looking statements. Actual
results or events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make.
Various important factors could cause actual results or events to differ
materially from the forward-looking statements that we make. Such
factors include, among others, risks that we will not obtain the capital
necessary to fund our operations in a timely manner, if ever, or on
acceptable terms, that if we are unable to obtain additional capital, we
may be required to cease our ongoing clinical development activities,
that the results of clinical trials will not support our claims or
beliefs concerning the effectiveness of onapristone or any of our other
product candidates, that we will be able to successfully develop a
diagnostic to identify APR tumors, regulatory risks, and our reliance on
third party researchers and other collaborators. Additional risks are
described in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2015 and in its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2016. Arno is providing this information as of
the date of this press release and does not undertake any obligation to
update any forward-looking statements as a result of new information,
future events or otherwise.

 

 

 

 

 

 

Arno Therapeutics, Inc.

Condensed Statements of Operations

 (Amounts in thousands, except per share data)

 

Three Months Ended

June 30,

(Unaudited)

Six Months Ended

June 30,

(Unaudited)

 

2016

 

 

 

 

2015

 

 

2016

 

 

 

 

2015

 

Revenue

$

$

$

$

Operating expenses:

Research and development

2,056

2,648

3,600

5,123

General and administrative

 

1,254

 

 

1,331

 

 

2,535

 

 

2,719

 

Total operating expenses

 

3,310

 

 

3,979

 

 

6,135

 

 

7,842

 

Loss from operations

(3,310

)

(3,979

)

(6,135

)

(7,842

)

Interest income/(expense), net

1

2

(12

)

6

Other income/(expense), net

 

1,167

 

 

532

 

 

 

296

 

 

1,002

 

Net income/(loss)

$

(2,142

)

$

(3,445

)

$

(5,851

)

$

(6,834

)

Net income/(loss) per share – basic and diluted

$

(0.05

)

$

(0.17

)

$

(0.15

)

$

(0.33

)

Shares used in computation of net loss per share – basic and diluted

 

41,563

 

 

20,409

 

 

40,168

 

 

20,409

 

 

 

 

 

 

 

 

 

Balance Sheet Data

(Amounts in thousands)

 

June 30,

2016

(Unaudited)

December 31,

2015

Cash and cash equivalents

$

937

$

67

Total assets

$

1,099

$

361

Current liabilities

$

1,784

$

4,231

Accumulated deficit

$

(99,146

)

$

(93,295

)

Stockholders’ deficit

$

(5,219

)

$

(8,624

)

 

 

 

 

 

 

Reconciliation Between Reported (GAAP) and Adjusted Net Loss
(Non-GAAP)

(Amounts in thousands, except per share data)

 

Three Months Ended

June 30,

2016

 

 

2015

Net income/(loss), as reported (GAAP)

$

(2,142

)

$

(3,445

)

Adjustments for reconciled items:

Change in fair value of derivative liability, non-cash

(1,118

)

(545

)

Stock based compensation, non-cash

 

1,013

 

 

957

 

Adjusted net income/(loss) (non-GAAP)

$

(2,247

)

$

(3,033

)

 

Net income/(loss) per share – basic, as reported (GAAP)

$

(0.05

)

$

(0.17

)

Adjustments for reconciled items:

Change in fair value of derivative liability, non-cash

(0.03

)

(0.03

)

Stock based compensation, non-cash

 

0.03

 

 

0.05

 

Adjusted net income/(loss) per share – basic (non-GAAP)

$

(0.05

)

$

(0.15

)

 

 

 

 

 

Six Months Ended

June 30,

2016

 

 

2015

Net income/(loss), as reported (GAAP)

$

(5,851

)

$

(6,843

)

Adjustments for reconciled items:

Change in fair value of derivative liability, non-cash

(220

)

(987

)

Stock based compensation, non-cash

 

1,921

 

 

1,923

 

Adjusted net income/(loss) (non-GAAP)

$

(4,150

)

$

(5,907

)

 

Net income/(loss) per share – basic, as reported (GAAP)

$

(0.15

)

$

(0.33

)

Adjustments for reconciled items:

Change in fair value of derivative liability, non-cash

(0.05

)

Stock based compensation, non-cash

 

0.05

 

 

0.09

 

Adjusted net income/(loss) per share – basic (non-GAAP)

$

(0.10

)

$

(0.29

)

 

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