Ardea Biosciences Inc. (RDEA) reported a fourth quarter fiscal 2009 net loss of $6.3 million or 34 cents per share as against a loss of $12.7 million or 82 cents in the year-ago quarter. This was mainly attributable to higher revenue recorded in the quarter. Analysts expected a loss of 28 cents per share.
Revenue in the reported quarter jumped to $8.25 million from $44,000 in the year-ago quarter. The increased revenues resulted from the recognition of a portion of the upfront, non-refundable license fee and reimbursement of third-party development costs under the global agreement with Bayer HealthCare, entered into by Ardea in April 2009, for the development of MEK inhibitors for the treatment of cancer. Specifically, license fee climbed to $7.25 million from $0.04 million in the fourth quarter of 2008.
Meanwhile the company recorded reimbursable research and development costs of $1.004 million, which was absent in the year-ago quarter.
Operating expenses for the quarter increased approximately 13% to $14.4 million primarily because of higher research and clinical development expenditures. Research and development expenses increased to $11.5 million from $10.5 million in the fourth quarter of 2008. The general and administrative expenses for the reported quarter increased to approximately $2.9 million from $2.2 million in the year-ago quarter.
For the full year 2009, the company suffered a loss of $30.87 million or $1.70 per share as against a loss of $55.1 million or $3.79 per share in 2008. This was attributable to higher revenue coupled with lower operating expenses recorded in 2009. The Zacks Consensus Estimate for 2009 stood at a loss of $1.64.
Revenue in 2009 jumped to $22.9 million from $0.3 million in 2008. License fee climbed to $20.4 million which was absent in 2008. Ardea recorded reimbursable research and development costs of $2.5 million which was again absent in 2008. Total revenue in 2008 came from sponsored research.
Operating expenses for the year decreased approximately 6.9% to $52.9 million primarily because of reduced research and clinical development expenditures. Research and development expenses decreased to $42.2 million from $44.9 million in 2008. This is because the company is concentrating its resources on the further development of its gout candidates, RDEA594 and RDEA684.
Furthermore, during the second half of 2009, Ardea saved approximately $2.2 million following a restructuring plan which saw a substantial workforce reduction to conserve cash. These reductions were partially offset by severance-related restructuring charges of approximately $0.8 million in addition to higher interest expenses but lower interest income during 2009. The general and administrative expenses for 2009 decreased to approximately $10.7 million from $11.9 million in 2008.
The company ended the year with $50.9 million in cash, cash equivalents and short-term investments compared to $57.7 million as of Dec 31, 2008. The decrease was attributable to the cash usage to fund clinical programs, personnel costs apart from costs for other general corporate purposes which were partially offset by the receipt of a $35 million non-refundable, upfront license fee from Bayer.
Management expects the cash balance to be sufficient to fund operations till the first quarter of 2011. The guidance is exclusive of any forecasted expenses related to the late-stage development of gout candidate RDEA594, the receipt of milestone payments under the agreement with Bayer, proceeds from future partnering activities, or payments related to the asset purchase agreement with Valeant Pharmaceuticals (VRX).
Currently, we are Neutral on Ardea.
Read the full analyst report on “RDEA”
Read the full analyst report on “VRX”
Zacks Investment Research