Longboard Health Holdings LLC

Nov. 4, 2021 20:05 UTC – Phase 3 ELEVATE UC 52 and 12 on course for Q1 2022 topline data readout – First participant randomized in the Phase 2 trial for temanogrel in Raynaud’s phenomenon secondary to systemic sclerosis – Strong liquidity position to support continued pipeline progress PARK CITY, Utah--(BUSINESS WIRE)-- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today provided a corporate update and reported financial results for the third quarter ended September 30, 2021. “During the quarter, the team continued to make significant progress across all key programs, including reaching full enrollment for the ELEVATE UC 12 program,” said Amit D. Munshi, President and CEO of Arena. “ELEVATE UC 12 and ELEVATE UC 52 remain on track and we continue to look forward to the data readout in the first quarter of next year.” Key Program & Corporate Updates Gastroenterology In August the Phase 3 ELEVATE UC 12 trial for etrasimod in ulcerative colitis reached full enrollment; topline data for both ELEVATE UC 12 and ELEVATE UC 52 expected contemporaneously in Q1 2022 In August announced collaboration with Second Genome to identify microbiome biomarkers associated with clinical benefit in the CULTIVATE program for Crohn’s disease In August increased target enrollment in CULTIVATE study A from 50 participants to 70 participants; dose-ranging data anticipated to read out in early Q2 2022; enhanced data may allow transition to a registrational program and reduction of the overall program timeline Dermatology In July we evaluated an updated OLE data set from the Phase 2 ADVISE trial for 2 mg etrasimod in atopic dermatitis that demonstrated meaningful effects at week 16 of the OLE period on validated Investigator Global Assessment (vIGA) at 47%, Eczema Area and Severity Index (EASI-75) at 72%, and Peak Pruritis Numeric Rating Scale (PP-NRS) at 61% with consistent safety pro to one year In July the Phase 2 trial for etrasimod in alopecia areata was amended to add a 3 mg cohort and expand patient population subtypes; topline data expected 2H 2022 Cardiovascular In November the first participant was randomized in the Phase 2 trial for temanogrel in Raynaud’s phenomenon secondary to systemic sclerosis In July a Phase 2 trial for APD418 in acute heart failure was initiated Corporate Updates In July we entered into a strategic collaboration and option agreement with Aristea for the development of RIST4721, an oral, selective CXCR2 antagonist being developed for the treatment of palmoplantar pustulosis (PPP) and other neutrophil-mediated diseases In July Dr. Doug Manion was appointed as Executive Vice President, Research & Development Financial Update Third Quarter 2021 Financial Results Research and development (R&D) expenses for the third quarter totaled $94.2 million compared to $79.8 million in the same period in 2020. This increase was primarily driven by our advancing clinical studies, including the etrasimod Phase 3 program, as well as an increase in personnel expenses to support our clinical programs. The R&D non-cash, share-based compensation was $8.1 million in the third quarter as compared to $6.6 million in the same period in 2020 Selling, general and administrative (SG&A) expenses for the third quarter totaled $30.3 million, compared to $19.0 million in the third quarter of 2020. This increase was primarily driven by an increase in personnel expenses and other professional fees. The SG&A non-cash, share-based compensation was $9.2 million in the third quarter as compared to $5.8 million in the same period in 2020 Net loss for the third quarter was $196.3 million compared to net loss of $97.4 million for the same period in 2020. This includes $70 million of Acquired In-Process R&D expense associated with our recently announced collaboration with Aristea Therapeutics Basic and diluted net loss per share for the third quarter was $3.21 compared to basic and diluted net loss per share of $1.69 for the same period in 2020 Cash, cash equivalents and marketable securities were $0.8 billion at September 30, 2021 as compared to $1.1 billion at December 31, 2020. In addition to normal operating cash burn for the quarter, we made a $70 million payment in connection with our recently announced collaboration with Aristea Therapeutics Conference Call & Webcast Information Arena will host a conference call and live webcast to discuss the financial results and corporate update via a question and answer session with the investment community today, Thursday, November 4, 2021, at 4:30 PM ET. Conference call will be broadcast live in listen-only mode on the company’s investor relations website at . Shortly after the event, a recording will be archived under the investor relations section of Arena’s website for 30 days. About Arena Pharmaceuticals ARENA Pharmaceuticals is a team with a singular purpose – deliver important medicines to patients. In a rapidly changing global market, we work with a sense of urgency every day to understand the needs of all our stakeholders, identify bold, sometimes disruptive, ideas to get medicines to patients, and relentlessly execute until it’s done. ARENA - Care More. Act Differently. Etrasimod, temanogrel, and APD418 are investigational compounds that are not approved for any use in any country. Forward-Looking Statements Certain statements in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements may be identified by words such as “on course,” “on track,” “look forward to,” “expected,” and “anticipated” and include, without limitation, statements about the following: Arena’s clinical programs, including expectations regarding study progress, the timing of data readouts for ongoing trials, and other statements under “Key Program & Corporate Updates” above. For such statements, Arena claims the protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from Arena’s expectations. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, the following: clinical trials and other studies may not proceed at the time or in the manner expected or at all; topline data may not accurately reflect the complete results of a particular study or trial; results of clinical trials and other studies are subject to different interpretations and may not be predictive of future results; the timing and outcome of research, development and regulatory review is uncertain, and Arena’s drug candidates may not advance in development or be approved for marketing; enrolling patients in Arena’s ongoing and intended clinical trials is competitive and challenging; the duration and severity of the coronavirus disease (COVID-19) pandemic, including but not limited to the impact on Arena’s clinical operations, the operations of Arena’s suppliers, partners, collaborators, licensees, and capital markets, which in each case remains uncertain; risks related to developing and commercializing drugs; Arena will need additional funds to advance all of its programs; the impact of competition; risks related to unexpected or unfavorable new data; the risk that regulatory agencies may interpret or weigh the importance of data differently and reach different conclusions than Arena or others, request additional information, have additional recommendations or change their guidance or requirements before or after approval; satisfactory resolution of litigation or other disagreements with others; and risks related to the enforcement of Arena’s and third parties’ intellectual property rights. Additional factors that could cause actual results to differ materially from those stated or implied by Arena’s forward-looking statements are disclosed in Arena’s filings with the Securities and Exchange Commission (SEC), including but not limited to Arena’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, which was filed with the SEC on August 5, 2021. These forward-looking statements represent Arena’s judgment as of the time of this release. Arena disclaims any intent or obligation to update these forward-looking statements, other than as may be required under applicable law. Arena Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenues: Collaboration and other revenue $ — $ 20 $ — $ 20 Royalty revenue — — — 262 Total revenues — 20 — 282 Operating Costs and Expenses: Research and development 94,180 79,820 309,168 223,299 Acquired in-process research and development 70,000 — 70,000 — Selling, general and administrative 30,305 19,002 91,701 68,321 Total operating costs and expenses 194,485 98,822 470,869 291,620 Loss from operations (194,485 ) (98,802 ) (470,869 ) (291,338 ) Interest and Other Income (Expense): Interest income 205 1,825 1,223 9,836 Interest expense (1,031 ) (1,120 ) (3,155 ) (3,427 ) Other (expense) income, net (1,001 ) 659 (1,892 ) 2,356 Gain from Longboard equity method investment — — 13,869 — Total interest and other income (expense), net (1,827 ) 1,364 10,045 8,765 Net loss $ (196,312 ) $ (97,438 ) $ (460,824 ) $ (282,573 ) Net loss per share, basic and diluted: $ (3.21 ) $ (1.69 ) $ (7.61 ) $ (5.27 ) Shares used in calculating net loss per share, basic and diluted: 61,140 57,779 60,574 53,608 Arena Pharmaceuticals, Inc. Condensed Consolidated Balance Sheet Data (In thousands, except share data) (Unaudited) September 30, 2021 December 31, 2020 Assets Current assets: Cash and cash equivalents $ 386,653 $ 219,544 Short-term investments, available-for-sale 385,014 884,497 Prepaid expenses and other current assets 19,253 35,266 Total current assets 790,920 1,139,307 Investments, available-for-sale 52,953 — Land, property and equipment, net 19,558 22,090 Other non-current assets 37,596 29,323 Total assets $ 901,027 $ 1,190,720 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and other accrued liabilities $ 30,037 $ 35,351 Accrued clinical and preclinical study fees 18,434 18,325 Current portion of lease financing obligations 4,884 4,401 Total current liabilities 53,355 58,077 Other long-term liabilities 9,466 10,963 Lease financing obligations, less current portion 37,485 41,211 Commitments and contingencies Stockholders' equity: Preferred stock, $0.0001 par value, 7,500,000 shares authorized, no shares issued and outstanding at September 30, 2021 and December 31, 2020 — — Common stock, $0.0001 par value, 147,000,000 shares authorized at September 30, 2021 and December 31, 2020; 61,280,176 and 58,611,210 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 6 6 Additional paid-in capital 2,769,148 2,587,494 Accumulated other comprehensive income 122 700 Accumulated deficit (1,968,555 ) (1,507,731 ) Total stockholders' equity 800,721 1,080,469 Total liabilities and stockholders' equity $ 901,027 $ 1,190,720

Prometheus Biosciences contends that the current treatments for inflammatory bowel disease are inadequate, taking a “one-size-fits-all approach” that doesn’t account for biologic variation. The biotech company is taking a precision medicine approach to bowel disorders, aiming to address specific groups of patients with drugs and companion diagnostics. Now it has $190 million in IPO cash to advance that research. Prometheus Biosciences priced its stock offering at $19 per share, the top end of its revised price range. On Monday, the San Diego-based company set terms for an offering of more than 7.3 million shares in the range of $16 and $18 apiece. On Thursday, Prometheus boosted its target to 9 million shares in the range of $18 and $19 each. When the Prometheus finally priced the IPO late Thursday night, it kept the top end of the revised range but boosted the offering by an additional 1 million shares. Those shares will trade on the Nasdaq under the stock symbol “RXDX.” Prometheus’s precision medicine technology is called Prometheus360. The platform includes a gastrointestinal database and a biobank of specimens from patients suffering from IBD and other gastrointestinal disorders. The biobank, licensed exclusively from Cedars-Sinai Medical Center, holds more than 20,000 samples collected for more than 20 years. The company says in its IPO prospectus that applying machine-learning techniques to these samples enables it to discover and develop precision therapies and companion diagnostics. This approach is intended to make clinical development faster and more efficient. “IBD clinical development programs can take up to seven to ten years to complete and physicians are often challenged with the task of enrolling patients from a limited pool of qualified candidates into a large number of trials with undifferentiated mechanisms of action,” the company said in the IPO filing. “By using companion diagnostics to target a specific subset of the IBD population, we expect to reduce overall development time and cost through smaller trials and faster enrollment rates.” Prometheus’s lead drug candidate, PRA023, is an antibody designed to block tumor necrosis factor-like cytokine 1A (TL1A), a protein that plays a role in IBD. The company says its drug has the potential to help IBD patients whose disease is predisposed to high expression of TL1A. Prometheus is developing the drug for two types of IBD, ulcerative colitis and Crohn’s disease. Last December, the company began a Phase 1a study in healthy volunteers. If those tests show the drug is safe, Prometheus expects to proceed to a randomized, placebo-controlled Phase 2 study in the third quarter of this year, according to the IPO filing. That study will enroll patients with moderate-to-severe ulcerative colitis. The company will also commence an open-label Phase 1b test in patients with moderate-to-severe Crohn’s disease. Data from both studies are expected in the second half of 2022. In addition to the IBD drug research, Prometheus is developing a companion diagnostic that can be used to identify the patients predisposed to higher expression of TL1A, making them more likely to respond to the experimental drug. The company plan to begin clinical evaluation of this diagnostic with the Phase 2 ulcerative colitis and Phase 1b Crohn’s disease tests of PRA023. Two other programs in the Prometheus pipeline are preclinical. PR600 and PR300 each address different targets associated with IBD. With the IPO cash in hand, Prometheus plans to spend about $60 million on its lead drug candidate. Another $15 million is set aside for PR600, which the company expects to advance into Phase 1 testing. Prometheus was initially formed in 2016 under the name Precision IBD. In 2019, the company changed its name to Prometheus Biosciences. The name change followed the acquisition of Prometheus Laboratories and other assets from Nestlé Health Science, a unit of multinational food and drink conglomerate Nestlé. Prometheus Laboratories provided laboratory developed tests that gastroenterologists use in monitoring disease in IBD patients, helping to inform treatment decisions, according to the IPO filing. At the end of last year, that diagnostics services business was spun off. Prometheus is currently working with Takeda Pharmaceutical to develop a companion diagnostic for one unspecified drug target. The Japanese pharma giant also has the option to select an additional drug target. Takeda will pay for the development and commercialization of any drug that it develops for IBD. Prometheus is responsible for development and commercialization of any diagnostic products that come out of the partnership. The upfront payment wasn’t disclosed when the deal was announced in 2019 but the IPO filing shows that the payment to Prometheus was $1.5 million. The biotech is eligible to receive up to $47.9 million in development and regulatory milestone payments for each target covered by the partnership, plus additional payments from commercialization and sales milestones. In total, Prometheus earn up to $420 million from achieving milestones. Prometheus’s largest shareholder is Cedars-Sinai, which owns a 13.8% post-IPO stake, according to the prospectus. Nestlé is the next-largest shareholder at 10.3%. Longboard Pharma’s IPO brings in $80M for neuroscience drugs In other biotech IPO news, Longboard Pharmaceuticals raised $80 million for its pipeline of neurological disease drugs. The San Diego-based biotech priced its offering of 5 million shares at $16 apiece, the top end of its targeted price range. Shares of the company will trade on the Nasdaq under the stock symbol “LBPH.” Longboard spun out of Arena Pharmaceuticals last year and its small molecule drug candidates come from the Arena’s technology platform. Those drugs target G protein-coupled receptors (GPCRs), proteins that are a target of interest for some neuroscience biotechs. Longboard’s lead program, LP352, is currently in Phase 1 testing as a potential treatment for developmental and epileptic encephalopathies, including Dravet syndrome and Lennox-Gastaut syndrome, two rare forms of epilepsy. Last month, Longboard began a testing multiple doses in the study. Preliminary data are expected in the second half of 2021, according to the IPO filing. The company expects to proceed to Phase 1a/2b testing in the first quarter of 2022. Longboard has earmarked between $21 million and $25 million of the IPO proceeds for the development of that compound through the completion of the Phase 1a/2b testing. Two additional compounds are preclinical. LP143 is being developed for neurodegenerative diseases associated with neuroinflammation caused by the activation of immune cells called microglia. LP659 is a potential treatment for a range of central nervous system disorders associated with neuroinflammation. Longboard has set aside up to $12 million for LP143; up to $10 million is budgeted for LP659. In the filing, the company says the IPO proceeds combined with cash reserves are expected to fund operations for the next two years. Arena held a 33.4% stake in Longboard before the IPO. Following the stock offering, Arena’s stake is about 23.5%, according to the filing.