- On November 4, 2016, Arno completed the second closing (approximately $425,250) under its August 2016 private placement of common stock and common stock purchase warrants. An additional $250,000 investment from this private placement remains to be completed. After the financing is completed, total gross proceeds from the August 2016 private placement will be approximately $2.95 million.
- On September 30, 2016, Arno sold AR-67 preclinical and clinical data package to Vivacitas Oncology for total gross proceeds of $500,000. This transaction follows Arno's strategic plan to focus its efforts and resources on its other development candidates.
- 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. After the Data Review Committee (DRC) reviewed the interim data of the full dose 50 mg twice daily onapristone in combination with abiraterone acetate, the DRC recommended to continue accrual to the next predetermined protocol assessment point. Accrual is ongoing at the UK and recently opened US investigative sites.
Third Quarter 2016 Financial ResultsFor the three months ended September 30, 2016, Arno reported net loss of $3.8 million, or $0.09 per share, which includes non-cash expense of $2.0 million related to the increase 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 expense of $3.0 million, the Company reported a net loss of approximately $0.8 million, or $0.02 per share, on a non-GAAP basis. Adjusted third quarter 2015 net loss was approximately $1.9 million, or $0.10 per share, on a non-GAAP basis, which includes the same non-cash adjustments as third quarter 2016. On a GAAP basis, third quarter 2015 net loss was $0.7 million, or $0.03 per share. The primary factors for the $1.1 million year-over-year improvement in adjusted (non-GAAP) net loss in the third quarter of 2016 compared to the third quarter of 2015 were reduced spending of $0.4 million on onapristone's clinical trials and non-clinical research activities, lower compensation expense of $0.1 million and receipt of final proceeds of $0.4 million from the sale of AR-67 preclinical and clinical data package. For the nine months ended September 30, 2016, Arno reported net loss of $9.7 million, or $0.23 per share, which includes non-cash expense of $1.8 million related to the increase in derivative liability of common stock warrants, and $2.9 million of non-cash stock based compensation expense. Adjusting for these non-cash items, which resulted in an expense of $4.7 million, the Company reported a net loss of approximately $5.0 million, or $0.12 per share, on a non-GAAP basis. This compares to an adjusted non-GAAP net loss for the first nine months of 2015 of approximately $7.8 million, or $0.38 per share, when considering the same non-cash adjustments as for the first nine months of 2016. On a GAAP basis, the first nine months of 2015 net loss was $7.5 million, or $0.37 per share.
The primary factors for the $2.8 million year-over-year improvement in adjusted (non-GAAP) net loss in the first nine months of 2016 compared to the first nine months of 2016 were reduced spending of $1.2 million on onapristone's non-clinical research activities, lower compensation expense of $0.8 million and total gross proceeds of $0.5 million from the sale of AR-67 preclinical and clinical data package.Cash and cash equivalents as of September 30, 2016 totaled $2.1 million, compared to $0.1 million as of December 31, 2015. In combination with the capital raised by the Company in August 2016, the current level of cash resources is expected to fund the Company's planned operating activities into January 2017. 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 OnapristoneOnapristone 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, statements regarding the expected proceeds from the Company's August 2016 private placement, statements regarding Arno's available cash resources, 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 September 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 September 30, (Unaudited)||Nine Months Ended September 30, (Unaudited)|
|Research and development||1,116||1,793||4,716||6,915|
|General and administrative||1,116||1,082||3,651||3,801|
|Total operating expenses||2,232||2,875||8,367||10,716|
|Loss from operations||(2,232||)||(2,875||)||(8,367||)||(10,716||)|
|Interest income/(expense), net||1||-||(11||)||6|
|Other income/(expense), net||(1,618||)||2,195||(1,322||)||3,197|
|Net income/(loss) per share - basic and diluted||$||(0.09||)||$||(0.03||)||$||(0.23||)||$||(0.37||)|
|Shares used in computation of net loss per share - basic and diluted||44,706||20,409||41,692||20,409|
|Balance Sheet Data (Amounts in thousands)|
|September 30, 2016 (Unaudited)||December 31, 2015|
|Cash and cash equivalents||$||2,124||$||67|
|Reconciliation Between Reported (GAAP) and Adjusted Net Loss (Non-GAAP) (Amounts in thousands, except per share data)|
|Three Months Ended September 30,|
|Net income/(loss), as reported (GAAP)||$||(3,849||)||$||(680||)|
|Adjustments for reconciled items:|
|Change in fair value of derivative liability, non-cash||2,011||(2,199||)|
|Stock based compensation, non-cash||1,025||934|
|Adjusted net income/(loss) (non-GAAP)||$||(813||)||$||(1,945||)|
|Net income/(loss) per share - basic, as reported (GAAP)||$||(0.09||)||$||(0.03||)|
|Adjustments for reconciled items:|
|Change in fair value of derivative liability, non-cash||0.05||(0.11||)|
|Stock based compensation, non-cash||0.02||0.04|
|Adjusted net income/(loss) per share - basic (non-GAAP)||$||(0.02||)||$||(0.10||)|
|Nine Months Ended September 30,|
|Net income/(loss), as reported (GAAP)||$||(9,700||)||$||(7,513||)|
|Adjustments for reconciled items:|
|Change in fair value of derivative liability, non-cash||1,791||(3,186||)|
|Stock based compensation, non-cash||2,947||2,857|
|Adjusted net income/(loss) (non-GAAP)||$||(4,962||)||$||(7,842||)|
|Net income/(loss) per share - basic, as reported (GAAP)||$||(0.23||)||$||(0.37||)|
|Adjustments for reconciled items:|
|Change in fair value of derivative liability, non-cash||0.04||(0.15||)|
|Stock based compensation, non-cash||0.07||0.14|
|Adjusted net income/(loss) per share - basic (non-GAAP)||$||(0.12||)||$||(0.38||)|