ARDEA BIOSCIENCES, INC. (RDEA) filed Quarterly Report for the period ended 2009-09-30.
IntraBiotics Pharmaceuticals Inc. develops and intends to commercialize new antibacterial and antifungal drugs for the prevention or treatment of serious infectious diseases. The company obtained statistically significant data from human clinical trials that test for preliminary safety and efficacy that indicate each of the products are well tolerated and support further efficacy trials. The new antibiotics may solve medical problems for patients who have few or no satisfactory alternatives. Ardea Biosciences, Inc. has a market cap of $257 million; its shares were traded at around $14.05 with and P/S ratio of 845.3.
Highlight of Business Operations:
For the three and nine months ended September 30, 2009, research and development expense decreased to $9.0 million and $30.7 million, respectively, from $11.5 million and $34.4 million for the same periods in 2008. The decrease in research and development expense for the three and nine months ended September 30, 2009 was primarily due to a decrease in spending of approximately $1.5 million and $3.5 million, respectively, mainly due to reduced discovery research and clinical development expenditures as we focus our resources on our gout-related programs, RDEA594 and RDEA684. Research and development expense also decreased approximately $1.1 million and $1.0 million for the three and nine month periods, respectively, as a result of savings from our May 2009 restructuring. In addition, the decrease in year-to-date research and development expense was a result of approximately $0.3 million in one-time facility-related expenses incurred in the first quarter of 2008 related to the facility relocation and decreased monthly rent and common area maintenance charges for the San Diego facility, which we occupied beginning in March 2008. These decreases were partially offset by severance-related charges recorded in 2009 related to our May 2009 restructuring of approximately $0.1 million and $0.7 million for the three- and nine-month periods, respectively. In addition, year-to-date research and development expense was also partially offset by an increase in share-based compensation expense of approximately $0.4 million for the nine months ended September 30, 2009 as compared to the same period in 2008.
For the three and nine months ended September 30, 2009, general and administrative expense decreased to $2.4 million and $7.8 million, respectively, from $3.0 million and $9.7 million for the same periods in 2008. The decrease in general and administrative expense was primarily the result of a decrease in personnel and related costs due to a reduction in headcount and decreases in consulting and
professional outside services of approximately $0.4 million and $1.0 million for the three and nine months ended September 30, 2009, respectively as compared to 2008. In addition, the decrease in general and administrative expense was a result of one-time costs incurred in 2008 related to the facility relocation of approximately $0.2 million and $0.7 million for the three and nine months ended September 30, 2008, respectively.
For the three and nine months ended September 30, 2009, other income (expense) decreased to ($0.2) million and ($0.7) million net other expense, respectively, from $0.3 million and $1.5 million net other income for the same periods in 2008. The decrease in other income (expense) was primarily a result of an increase in interest expense in connection with our growth capital loan and capital lease obligations entered into in the second half of 2008 and a decrease in interest income due to lower average interest rates as compared to 2008.
In November 2008, we entered into an agreement with Oxford Finance Corporation and Silicon Valley Bank, (collectively the “Lenders”), pursuant to which the Lenders provided us with an approximately three-year, $8.0 million growth capital loan. Interest accrues at a rate of 12% per annum, with monthly interest-only payments required during a period that began on the loan funding date and continued through February 28, 2009, followed thereafter by equal monthly payments of principal and interest over a period of 33 months. In addition, we are required to pay a total loan commitment fee of approximately $0.5 million, of which $0.1 million was paid upon entering into the loan agreement and the remaining $0.4 million is due at the end of the term of the loan. We have the option to prepay in full the outstanding balance of the loan, subject to a prepayment fee. The loan is collateralized by our general assets, excluding intellectual property. There are no financial covenants associated with the loan. In connection with the loan, we issued to the Lenders warrants to purchase up to an aggregate of 56,010 shares of our common stock at an exercise price of $8.57 per share. In September 2009, Silicon Valley Bank exercised its warrant to purchase 21,004 shares of our common stock using the conversion right provision in the warrant agreement, which resulted in the net issuance of 11,862 shares of common stock and no net cash proceeds to us. The remaining warrants are currently exercisable and expire seven years from the date of issuance.
As of September 30, 2009, we had $59.6 million in cash, cash equivalents, and short-term investments, and $1.4 million in receivables, compared to $57.7 million in cash, cash equivalents, and short-term investments, and $0.4 million in receivables as of December 31, 2008. The increase in cash, cash equivalents and short-term investments and receivables for the first nine months of 2009 was primarily due to the receipt of a $35.0 million non-refundable, upfront license fee and the expected reimbursement of third-party development costs associated with our MEK inhibitor program under the License Agreement with Bayer, offset by the use of cash to fund our clinical-stage programs, personnel costs and for other general corporate purposes.
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