SEC Filings

10-Q
ARRAY BIOPHARMA INC filed this Form 10-Q on 05/10/2017
Entire Document
 

management, business development, accounting, information technology and administration costs, including patent filing and prosecution, recruiting and relocation, consulting and professional services, travel and meals, facilities, depreciation and other office expenses.

General and administrative expenses increased to approximately $11.7 million compared to $8.4 million, for the three months ended March 31, 2017 and 2016, respectively, and to approximately $28.4 million compared to $25.7 million, for the nine months ended March 31, 2017 and 2016, respectively.

The increase in general and administrative expense during the three- and nine-month periods is primarily driven by costs associated with building our commercial infrastructure as we prepare for potential launch as well as increased legal and stock based compensation charges versus prior year.


Other Income (Expense)

Below is a summary of our other income (expense) (dollars in thousands):
 
Three Months Ended
 
Change
 
Nine Months Ended
 
Change
 
March 31,
 
2017 vs. 2016
 
March 31,
 
2017 vs. 2016
 
2017
 
2016
 
$
 
%
 
2017
 
2016
 
$
 
%
Realized gain on investments and other
$785
 
$

 
785

 
(a)

 
$
785

 
$

 
785

 
(a)

Impairment loss related to cost method investment

 

 


(a)

 
(1,500
)
 

 
(1,500
)

(a)
Change in fair value of notes payable
(1,300
)
 

 
(1,300
)

(a)

 
(2,100
)
 

 
(2,100
)

(a)
Interest income
228

 
76

 
152

 
200
 %
 
510

 
167

 
343

 
205
 %
Interest expense
(3,095
)
 
(2,743
)
 
(352
)
 
(13
)%
 
(9,181
)
 
(8,092
)
 
(1,089
)
 
(13
)%
Total other income (expense), net
$
(3,382
)
 
$
(2,667
)
 
$
(715
)
 
(27
)%
 
$
(11,486
)
 
$
(7,925
)
 
$
(3,561
)
 
(45
)%
(a) Not meaningful.

Prior to September 30, 2016, the shares of preferred stock of VentiRx Pharmaceuticals, Inc. ("VentiRx") that we received under a February 2007 collaboration and licensing agreement with VentiRx had a recorded cost of $1.5 million. We do not have a controlling interest nor do we exert significant influence over VentiRx.  During the first quarter of fiscal 2017, a triggering event occurred related to the underlying viability of the investment which caused us to record a $1.5 million impairment loss related to this investment. During the third quarter of fiscal 2017, Celgene Corporation acquired all of the outstanding capital stock of VentiRx and we received cash proceeds in the amount of $0.5 million for our share of the proceeds of this acquisition. As of March 31, 2017, we have no remaining equity in VentiRx. We may be entitled to additional proceeds which are currently held in escrow, as well as our proportionate share of future milestone payments if certain development milestones are achieved on the program.

We recognized $1.3 million and $2.1 million during the three and nine months ended March 31, 2017 to adjust the fair value of the Redmile notes as discussed in Note 5 - Fair Value Measurements to our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Interest income is earned from our investments in available-for-sale marketable securities. Interest expense is primarily related to our 3.00% convertible senior notes due 2020, but also includes interest expense related to Convertible Promissory Notes we issued to Redmile, our term loan with Comerica Bank and our term loan with Silicon Valley Bank, which replaced our Comerica Bank facility in December 2016. Details of our interest expense for all of our debt arrangements outstanding during the periods presented, including actual interest paid and amortization of debt and loan transaction fees, are presented in Note 4 – Debt to our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Liquidity and Capital Resources
 
With the exception of fiscal year 2015, we have incurred operating losses and an accumulated deficit as a result of ongoing research and development spending since inception. As of March 31, 2017, we had an accumulated deficit of approximately $889.1 million, and we had a net loss of approximately $35.3 million and $87.2 million for the three and nine months ended March 31, 2017, respectively. We had net loss of approximately $92.8 million for the fiscal

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