UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): November
7, 2013
ARIAD
Pharmaceuticals, Inc.
(Exact
name of registrant as specified in its charter)
Delaware |
0-21696 |
22-3106987 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
26 Landsdowne Street, Cambridge, Massachusetts |
02139 |
(Address of principal executive offices) |
(Zip Code) |
Registrant's telephone number, including
area code: (617) 494-0400
Not
Applicable
(Former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 | Results of Operations and Financial Condition. |
In a press release dated November 12, 2013, ARIAD Pharmaceuticals, Inc. (the “Company”) announced financial results for the third quarter and nine months ended September 30, 2013, updated financial guidance for 2013, and revised areas of strategic focus. A copy of the press release is attached hereto as Exhibit 99.1. The information under the headings “2013 Third Quarter Financial Results” and “Today’s Conference Call at 8:30 a.m. ET” and the condensed consolidated financial information included in the press release are incorporated by reference into this Item 2.02 of this Current Report on Form 8-K.
ITEM 2.05 | Costs Associated With Exit or Disposal Activities. |
In a press release dated November 7, 2013, the Company announced that it is reducing its United States workforce by approximately 160 positions, or 40 percent of the workforce, following its decision to temporarily suspend the marketing and commercial distribution of Iclusig® (ponatinib) in the United States. The reduction includes positions in all major departments. This reduction in force is part of a broad program taken by the Company to significantly reduce its corporate operating expenses and extend its cash position.
The Company committed to this course of action on November 7, 2013. The Company expects the workforce reduction to be completed during the fourth quarter of 2013. The Company expects to record a restructuring charge of approximately $4.5 million to $5.5 million in the fourth quarter of 2013 related to termination benefits and other related charges. These amounts will be paid out in cash through 2014.
No reductions in staff positions in Europe were made as part of the reduction in force. Following the workforce reduction, the Company expects to have approximately 295 employees in the United States and Europe.
A copy of the press release is attached hereto as Exhibit 99.2 and the information contained therein, including in the forward-looking statement disclaimer at the end of the press release, is incorporated by reference into this Item 2.05 of this Current Report on Form 8-K.
ITEM 7.01 | Regulation FD Disclosure. |
In the press release dated November 12, 2013, the Company also provided information regarding updated financial guidance as well as upcoming medical meetings. The information set forth under the headings “Updated Financial Guidance” and “Upcoming Medical Meetings” in the press release are incorporated by reference into this Item 7.01 of this Current Report on Form 8-K.
ITEM 8.01 | Other Events. |
In the press release dated November 12, 2013, the Company also provided an update on its areas of strategic focus. The first and second paragraphs of the press release and the information set forth under the heading “Strategic Areas of Focus,” together with the forward-looking statement disclaimer at the end of the press release, are incorporated by reference into this Item 8.01 of this Current Report on Form 8-K.
ITEM 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit |
Description |
99.1 | Press release dated November 12, 2013. |
99.2 | Press release dated November 7, 2013. |
The press releases contain hypertext links to information on our websites. The information on our websites is not incorporated by reference into this Current Report on Form 8-K and does not constitute a part of this Form 8-K.
The portions of the press releases incorporated by reference into Item 2.05 and Item 8.01 of this Current Report on Form 8-K are being filed pursuant to such items. The remaining portions of the press release dated November 12, 2013 are being furnished pursuant to Items 2.02 and 7.01 of this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ARIAD Pharmaceuticals, Inc. |
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|
|
By: |
/s/ Edward M. Fitzgerald |
||
Edward M. Fitzgerald |
|||||
Executive Vice President, Chief Financial Officer |
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Date: |
November 12, 2013 |
Exhibit 99.1
ARIAD Reports Third Quarter 2013 Financial Results and Announces Significant Expense Reduction
$16.7 Million of Iclusig® Third-Quarter Net Sales
Conference Call Scheduled Today at 8:30 a.m. ET
CAMBRIDGE, Mass.--(BUSINESS WIRE)--November 12, 2013--ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) today reported financial results for the third quarter of 2013, including revenue from Iclusig® (ponatinib). The Company also announced actions it is taking to reduce cash used in operations over the next two years and to better align its resources to areas of narrowed strategic focus. The plan includes a previously disclosed reduction of approximately 40 percent of the Company’s U.S. workforce.
“Following recent corporate developments, we have taken swift action to significantly reduce operating expenses and extend our cash runway,” said Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. “Additionally, we have refocused and reprioritized our investments around near-term, shareholder-value creating activities. Taken together, we have extended our cash runway to mid-2015, while supporting the ongoing European commercialization of Iclusig, further development of Iclusig in patients with refractory Philadelphia-chromosome positive (Ph+) leukemias, advancement of AP26113 into a pivotal trial, and designation of our next clinical development candidate.”
2013 Third Quarter Financial Results
Product Revenues
Net sales of Iclusig were $16.7 million for the quarter ended September 30, 2013.
We currently use the sell-through method of accounting for recognition of product revenues. As of September 30, 2013, we had deferred revenue of $4.9 million in the U.S., representing Iclusig inventory at specialty pharmacies and specialty distributors, which had not yet shipped to the end customer.
In addition, in the quarter ended September 30, 2013, we shipped $2.9 million of Iclusig to patients in France through Autorisation Temporaire d’Utilisation (ATU), or Temporary Authorization for Use. Shipments under the French ATU will be recorded as revenue when the list price in France is determined, which we anticipate will now occur in the first quarter of 2014.
Net Loss
Net loss for the quarter ended September 30, 2013 was $66.3 million, or $0.36 per share, compared to net loss of $53.2 million, or $0.32 per share, for the same period in 2012.
Research and development expenses increased by $6.3 million from the third quarter of 2012 to the third quarter of 2013, predominantly reflecting costs to support clinical development activities for Iclusig and AP26113.
Selling, general and administrative expenses increased by $22.9 million from the third quarter of 2012 to the third quarter of 2013, reflecting investment in the commercial launch of Iclusig in the U.S. and Europe, and related activities.
Cash Position
As of September 30, 2013, cash, cash equivalents and marketable securities totaled $294.4 million, compared to $351.9 million at June 30, 2013.
Updated Financial Guidance
Taking into account our previously announced U.S. workforce reduction and other actions we are taking to reduce operating expenses, we now anticipate cash used in operations in 2013 of $240 million to $245 million, compared to our previous range of $245 million to $255 million. We expect research and development expenses of $175 million to $180 million and selling, general and administrative expenses of $150 million to $155 million for 2013. We now expect cash, cash equivalents and marketable securities at December 31, 2013 in the range of $215 million to $220 million.
Our revised operating plan reflects our goal of reducing operating expenses and extending our cash runway while prioritizing the Company’s resources and investments to focus on shareholder-value creation. Based on our revised operating plan, we expect significant reductions in operating expenses in all major departments, including reductions in costs related to:
Based on our revised operating plan, we expect to realize a decrease in cash used in operations, comparing 2014 to 2013, of approximately 35 percent, inclusive of personnel-related restructuring charges of approximately $5 million, which we expect to record in the fourth quarter of 2013. With this revised plan, we expect that our current cash, cash equivalents and marketable securities will be sufficient to fund operations to mid-2015. This revised operating plan does not assume any U.S. sales of Iclusig, partnering, licensing, or capital-raising activities. At the same time, this plan does not account for the possibility that Iclusig sales may resume in the U.S. prior to mid-2015.
Strategic Areas of Focus
We have prioritized the Company’s resources and investments to focus on shareholder-value creation in the following areas:
Upcoming Medical Meetings
Today’s Conference Call at 8:30 a.m. ET
We will hold a live webcast and conference call of our third quarter financial results this morning at 8:30 a.m. ET. The live webcast can be accessed by visiting the investor relations section of the Company’s website at http://investor.ariad.com. The call can be accessed by dialing 877-703-6108 (domestic) or 857-244-7307 (international) five minutes prior to the start time and providing the pass code 41631121. A replay of the call will be available on the ARIAD website approximately two hours after completion of the call and will be archived for three weeks.
About ARIAD
ARIAD Pharmaceuticals, Inc., headquartered in Cambridge, Massachusetts and Lausanne, Switzerland, is an integrated global oncology company focused on transforming the lives of cancer patients with breakthrough medicines. ARIAD is working on new medicines to advance the treatment of various forms of chronic and acute leukemia, lung cancer and other difficult-to-treat cancers. ARIAD utilizes computational and structural approaches to design small-molecule drugs that overcome resistance to existing cancer medicines. For additional information, visit http://www.ariad.com or follow ARIAD on Twitter (@ARIADPharm).
This press release contains “forward-looking statements” including, but not limited to, statements providing updates on ARIAD’s financial guidance for 2013 and 2014, updates on our operating plan and areas of strategic focus going forward, and updates on our anticipated cash runway in light of our operational changes. All such forward-looking statements are based on management's expectations and are subject to certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to the following: we may not achieve a resumption of marketing and commercialization of Iclusig in the United States; the revised prescribing information for Iclusig ultimately approved by the U.S. FDA or the risk mitigation programs we are required to implement may result in Iclusig’s no longer being commercially viable in the United States; commercialization of Iclusig in Europe could be adversely affected by recent safety issues concerning Iclusig, resulting in either withdrawal of marketing approvals in one or more countries or the imposition of pricing and reimbursement limits that adversely affect Iclusig’s commercial potential or viability in those jurisdictions; our refocused operating plan activities may not achieve the shareholder-value creation we desire; we may fail to advance AP26113 to a pivotal Phase 2 clinical trial in ALK+ non-small cell lung cancer in the time-frame we currently anticipate or at all; we may encounter delays or insurmountable challenges in our efforts to nominate a new development candidate based on our research and development efforts; we will continue to experience competition from alternative therapies; we may not succeed in obtaining approval for Iclusig outside of the United States and Europe and in additional indications; we continue to rely on third-party manufacturers, and on specialty pharmacies for the distribution of Iclusig, which may fail to perform as we require; preclinical data and early-stage clinical data that may not be replicated in later-stage clinical studies; the costs associated with our research, development, manufacturing and other activities may exceed those that we estimate; the conduct and results of preclinical and clinical studies of our product candidates may pose challenges for the ongoing development of our product candidates; we may experience difficulties or delays in obtaining regulatory approvals to market products; we may experience difficulties in raising additional capital to pursue our operating plans, which could materially adversely affect our ability to continue as an enterprise; our intellectual property may not provide the protection we require, and we may be subject to third-party intellectual property claims; we may fail to comply with extensive regulatory requirements; serious adverse events in patients being treated with Iclusig in clinical trials or in the commercial setting could continue to adversely affect the commercial potential or viability of Iclusig as a drug; we may experience safety issues with AP26113 or other product candidates that render such potential products of limited value; as well as risks related to key employees, markets, economic conditions, health care reform, prices and reimbursement rates; and other risk factors detailed in the Company's public filings with the U.S. Securities and Exchange Commission. The information contained in this press release is believed to be current as of the date of original issue. The Company does not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in the Company's expectations, except as required by law.
ARIAD PHARMACEUTICALS, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Unaudited) |
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In thousands, except per share data |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Revenue: | ||||||||||||||||||||
Product revenue, net | $ | 16,658 | $ | --- | $ | 36,956 | $ | --- | ||||||||||||
Other revenue | 74 | 85 | 252 | 484 | ||||||||||||||||
Total revenue | 16,732 | 85 | 37,208 | 484 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Cost of product revenue | 415 | --- | 913 | --- | ||||||||||||||||
Research and development | 45,145 | 38,822 | 127,076 | 107,021 | ||||||||||||||||
Selling, general and administrative | 37,395 | 14,482 | 108,977 | 37,994 | ||||||||||||||||
Total operating expenses | 82,955 | 53,304 | 236,966 | 145,015 | ||||||||||||||||
Other income (expense), net | (6) | 6 | 18 | (15,888 | ) | |||||||||||||||
Provision for income taxes | 110 | --- | 255 | -- | ||||||||||||||||
Net loss | $ | (66,339 | ) | $ | (53,213 | ) | $ | (199,995 | ) | $ | (160,419 | ) | ||||||||
Net loss per common share: | ||||||||||||||||||||
-- basic and diluted | $ | (0.36 | ) | $ | (0.32 | ) | $ | (1.09 | ) | $ | (0.98 | ) | ||||||||
Weighted-average number of shares of common stock outstanding: | ||||||||||||||||||||
-- basic and diluted | 185,238 | 166,296 | 182,859 | 164,378 | ||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION |
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In thousands |
September 30,
2013 |
December 31,
2012 |
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Cash, cash equivalents and marketable securities | $ | 294,443 | $ | 164,414 | |||||
Total assets | $ | 406,814 | $ | 180,193 | |||||
Total liabilities | $ | 152,993 | $ | 67,342 | |||||
Stockholders’ equity | $ | 253,821 | $ | 112,851 | |||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS INFORMATION |
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In thousands |
Nine Months Ended
September 30, |
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2013 | 2012 | |||||||||
Net cash used in operating activities | $ | (170,313 | ) | $ | (112,590 | ) | ||||
Net cash provided by (used in) investing activities | 23,243 | (69,024 | ) | |||||||
Net cash provided by financing activities | 312,157 | 16,977 | ||||||||
Effect of exchange rates on cash | (30) | --- | ||||||||
Net increase (decrease) in cash and cash equivalents | $ | 165,057 | $ | (164,637 | ) | |||||
CONTACT:
ARIAD Pharmaceuticals, Inc.
For Investors
Kendra
Adams, 617-503-7028
Kendra.adams@ariad.com
or
For
Media
Liza Heapes, 617-621-2315
Liza.heapes@ariad.com
Exhibit 99.2
ARIAD Announces Reduction in U.S. Workforce as Part of Broad Program to Reduce Operating Expenses
Approximately 40 percent of U.S. Workforce, or 160 Positions, to be Impacted
CAMBRIDGE, Mass.--(BUSINESS WIRE)--November 7, 2013--ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) today announced that it is reducing approximately 40 percent of its staff positions in the United States following its decision to temporarily suspend the marketing and commercial distribution of Iclusig® (ponatinib) in the U.S. The reduction in U.S. staff includes positions in all major departments. This reduction in force is part of a broad program taken by ARIAD to significantly reduce its corporate operating expenses and extend its cash position. ARIAD will share details of this program when it reports third quarter financial results on Tuesday, November 12.
ARIAD expects the workforce reduction to be completed by year-end and will yield pre-tax savings of approximately $26 million in 2014. Restructuring charges associated with these changes are expected to be approximately $5 million in the fourth quarter of 2013. There are no reductions in staff positions in Europe.
“This reduction in our workforce is a very painful and difficult action in which we are losing highly talented and dedicated employees, many of whom have worked for ARIAD for a number of years, but it is a necessary step in strengthening the Company financially,” said Harvey J. Berger, M.D., chairman and chief executive officer of ARIAD. “I would like to personally express my deep gratitude to all of the employees affected by this reduction and thank them for their contributions to both the Company and the cancer patients whom we continue to seek to help.”
Following the workforce reduction, ARIAD expects to have approximately 295 employees in the U.S. and Europe.
About ARIAD
ARIAD Pharmaceuticals, Inc., headquartered in Cambridge, Massachusetts and Lausanne, Switzerland, is an integrated global oncology company focused on transforming the lives of cancer patients with breakthrough medicines. ARIAD is working on new medicines to advance the treatment of various forms of chronic and acute leukemia, lung cancer and other difficult-to-treat cancers. ARIAD utilizes computational and structural approaches to design small-molecule drugs that overcome resistance to existing cancer medicines. For additional information, visit http://www.ariad.com or follow ARIAD on Twitter (@ARIADPharm).
This press release contains “forward-looking statements” including, but not limited to, statements concerning reduction in corporate operating expenses, extension of the Company’s cash position, extent and timing of the Company’s workforce reduction and the resultant number of Company employees, and the timing and amount of possible restructuring charges and pre-tax savings. The information contained in this press release is believed to be current as of the date of original issue. The Company does not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in the Company's expectations, except as required by law.
CONTACT:
ARIAD
For Investors
Kendra Adams, 617-503-7028
Kendra.adams@ariad.com
or
For
Media
Liza Heapes, 617-621-2315
Liza.Heapes@ariad.com