ARCA BIOPHARMA, INC. (ABIO, Financial) filed Quarterly Report for the period ended 2009-06-30.
ARCA biopharma Inc. a biopharmaceutical company develops genetically-targeted therapies for heart failure and cardiovascular diseases. It is positioned to bring personalized therapies for the treatment of cardiovascular disease through the use of genetics. Complementing the Company\'s cardiovascular science ARCA\'s management team has significant experience in developing and commercializing cardiovascular products. The Company\'s business focus combines expertise in cardiovascular pathophysiology molecular genetics clinical development and product commercialization. It is currently developing Gencaro (bucindolol hydrochloride) a cardiovascular drug for the treatment of chronic heart failure. The company is based in Broomfield Colorado. ARCA BIOPHARMA, INC. has a market cap of $29.8 million; its shares were traded at around $3.94 with and P/S ratio of 2.
ARCAs SG&A expenses were $3.9 million for the three months ended June 30, 2009, as compared to $1.7 million for the corresponding period in 2008, an increase of $2.1 million. ARCAs SG&A expenses were $9.2 million for the six months ended June 30, 2009, as compared to $3.4 million for the corresponding period of 2008, an increase of $5.8 million. The increase in SG&A expenses is attributed to integration activities related to the Merger, increased costs related to public-company reporting requirements, as well as personnel costs as ARCA was building its commercialization and administrative teams. The increase in SG&A expenses for the six months ended June 30, 2009 over the comparable 2008 period is primarily comprised of the following:
As result of the restructuring plan implemented, ARCA recorded a restructuring charge in the three and six months ended June 30, 2009 of approximately $1.2 million for personnel-related termination costs, of which $795,000 relates to severance amounts to be paid in cash and $387,000 relates to the acceleration of vesting on outstanding stock options. ARCA expects to complete all payments associated with this restructuring plan by the end of 2009.
Interest and other income was $103,000 in the three months ended June 30, 2009, as compared to $49,000 for the comparable 2008 period. Interest and other income was $204,000 for the six months ended June 30, 2009, as compared to $173,000 for the comparable 2008 period. For both the three and six month periods, the increase in the 2009 periods is due to higher investment balances representing the cash and investments acquired in the Merger. As these funds are expected to decline due to the requirements to fund future operations, ARCA expects a corresponding decrease in interest income for the remainder of 2009.
Interest and other expense was $49,000 for the three months ended June 30, 2009, as compared to $34,000 for the comparable 2008 period. Interest and other expense was $113,000 for the six months ended June 30, 2009, as compared to $39,000 for the comparable 2008 period. The increases in interest and other expense in the 2009 periods over the 2008 periods were primarily due to interest on the bank note payable and convertible notes payable. The convertible notes payable were converted into common stock upon closing of the Merger on January 27, 2009. The bank note payable was repaid in full in July 2009. Interest expense for the remainder of the year is expected to be minimal.
In July 2009, after giving consideration to forecasted cash balances, interest expense and covenants impacting liquidity, ARCA repaid all amounts due under its credit facility, consisting primarily of $2.9 million of outstanding principal and interest. Additionally, in August 2009, ARCA and landlord for the facility in Sunnyvale, CA entered into a Lease Surrender and Termination Agreement (the Termination Agreement) providing for the early termination of the lease agreement associated with the Sunnyvale facility. Under the terms and conditions of the Termination Agreement, the lease was terminated effective July 31, 2009 in consideration of a termination payment by the Company to the landlord consisting of: (i) retention by the landlord of a security deposit in the amount of approximately $0.5 million; (ii) the draw down by the landlord of full amount of the letter of credit in the amount of $6.0 million previously issued to secure tenant obligations under the lease; and (iii) an additional cash payment of approximately $2.0 million. As a result of the early termination of the lease agreement, ARCA expects to record a gain in the third quarter of approximately $2.3 million. ARCA entered into the Termination Agreement in an effort to improve near term liquidity and reduce the overall lease obligation associated with the Sunnyvale Facility.
Read the The complete ReportABIO is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
ARCA biopharma Inc. a biopharmaceutical company develops genetically-targeted therapies for heart failure and cardiovascular diseases. It is positioned to bring personalized therapies for the treatment of cardiovascular disease through the use of genetics. Complementing the Company\'s cardiovascular science ARCA\'s management team has significant experience in developing and commercializing cardiovascular products. The Company\'s business focus combines expertise in cardiovascular pathophysiology molecular genetics clinical development and product commercialization. It is currently developing Gencaro (bucindolol hydrochloride) a cardiovascular drug for the treatment of chronic heart failure. The company is based in Broomfield Colorado. ARCA BIOPHARMA, INC. has a market cap of $29.8 million; its shares were traded at around $3.94 with and P/S ratio of 2.
Highlight of Business Operations:
Research and development, or R&D, expenses were $3.5 million for the three months ended June 30, 2009 as compared to $2.2 million for the corresponding period of 2008. ARCAs R&D expenses were $8.1 million for the six months ended June 30, 2009 as compared to $4.6 million for the corresponding period of 2008, an increase of $3.5 million. For the six months ended June 30, 2009, approximately $2.0 million of the increase is attributed to clinical development costs for the NU 172 and NU 206 compounds. These expenses consist primarily of costs related to collaborative development arrangements, pre-clinical studies initiated during the period, and personnel costs related to former Nuvelo employees on transition plans. Employees on transition plans were employed for periods up to twelve weeks after the Merger to facilitate the transition of the business to ARCA. For the six months ended June 30, 2009, ARCA has spent approximately $1.7 million on NU 172 and approximately $300,000 on NU 206. The costs for NU 172ARCAs SG&A expenses were $3.9 million for the three months ended June 30, 2009, as compared to $1.7 million for the corresponding period in 2008, an increase of $2.1 million. ARCAs SG&A expenses were $9.2 million for the six months ended June 30, 2009, as compared to $3.4 million for the corresponding period of 2008, an increase of $5.8 million. The increase in SG&A expenses is attributed to integration activities related to the Merger, increased costs related to public-company reporting requirements, as well as personnel costs as ARCA was building its commercialization and administrative teams. The increase in SG&A expenses for the six months ended June 30, 2009 over the comparable 2008 period is primarily comprised of the following:
As result of the restructuring plan implemented, ARCA recorded a restructuring charge in the three and six months ended June 30, 2009 of approximately $1.2 million for personnel-related termination costs, of which $795,000 relates to severance amounts to be paid in cash and $387,000 relates to the acceleration of vesting on outstanding stock options. ARCA expects to complete all payments associated with this restructuring plan by the end of 2009.
Interest and other income was $103,000 in the three months ended June 30, 2009, as compared to $49,000 for the comparable 2008 period. Interest and other income was $204,000 for the six months ended June 30, 2009, as compared to $173,000 for the comparable 2008 period. For both the three and six month periods, the increase in the 2009 periods is due to higher investment balances representing the cash and investments acquired in the Merger. As these funds are expected to decline due to the requirements to fund future operations, ARCA expects a corresponding decrease in interest income for the remainder of 2009.
Interest and other expense was $49,000 for the three months ended June 30, 2009, as compared to $34,000 for the comparable 2008 period. Interest and other expense was $113,000 for the six months ended June 30, 2009, as compared to $39,000 for the comparable 2008 period. The increases in interest and other expense in the 2009 periods over the 2008 periods were primarily due to interest on the bank note payable and convertible notes payable. The convertible notes payable were converted into common stock upon closing of the Merger on January 27, 2009. The bank note payable was repaid in full in July 2009. Interest expense for the remainder of the year is expected to be minimal.
In July 2009, after giving consideration to forecasted cash balances, interest expense and covenants impacting liquidity, ARCA repaid all amounts due under its credit facility, consisting primarily of $2.9 million of outstanding principal and interest. Additionally, in August 2009, ARCA and landlord for the facility in Sunnyvale, CA entered into a Lease Surrender and Termination Agreement (the Termination Agreement) providing for the early termination of the lease agreement associated with the Sunnyvale facility. Under the terms and conditions of the Termination Agreement, the lease was terminated effective July 31, 2009 in consideration of a termination payment by the Company to the landlord consisting of: (i) retention by the landlord of a security deposit in the amount of approximately $0.5 million; (ii) the draw down by the landlord of full amount of the letter of credit in the amount of $6.0 million previously issued to secure tenant obligations under the lease; and (iii) an additional cash payment of approximately $2.0 million. As a result of the early termination of the lease agreement, ARCA expects to record a gain in the third quarter of approximately $2.3 million. ARCA entered into the Termination Agreement in an effort to improve near term liquidity and reduce the overall lease obligation associated with the Sunnyvale Facility.
Read the The complete ReportABIO is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
