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ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data is derived from our audited financial statements. These historical
results do not necessarily indicate future results. When you read this data, it is important that you also
read our financial statements and related notes, as well as the section entitled Management's Discussion
and Analysis of Financial Condition and Results of Operations appearing elsewhere in this Annual Report
on Form 10-K. Amounts are in thousands except per share data:
Years Ended June 30,
2012
2011
2010
2009
2008
Revenue
License and milestone revenue
$
71,249
$
53,426
$
32,485
$
7,754
$
7,295
Collaboration revenue
13,886
18,475
21,395
17,228
21,513
Total revenue
85,135
71,901
53,880
24,982
28,808
Operating expenses
Cost of revenue
24,261
28,916
28,322
19,855
21,364
Research and development for
proprietary drug discovery
56,719
63,498
72,488
89,560
90,347
General and administrative
15,202
16,261
17,121
18,020
15,591
Total operating expenses
96,182
108,675
117,931
127,435
127,302
Loss from operations
(11,047)
(36,774)
(64,051)
(102,453)
(98,494)
Other income (expense)
Realized gains (losses) on auction rate
securities, net
-
1,891
1,305
(17,742)
(1,872)
Loss on prepayment of long-term debt,
net
(942)
(6,340)
-
-
-
Interest income
32
406
864
2,116
6,064
Interest expense
(11,624)
(15,507)
(15,749)
(10,024)
(1,986)
Total other income (expense), net
(12,534)
(19,550)
(13,580)
(25,650)
2,206
Loss before income taxes
(23,581)
(56,324)
(77,631)
(128,103)
(96,288)
Income tax benefit
-
-
-
288
-
Net loss
$
(23,581)
$
(56,324)
$
(77,631)
$ (127,815)
$
(96,288)
Weighted average shares outstanding -
basic and diluted
70,619
55,447
50,216
47,839
47,309
Net loss per share - basic and diluted
$
(0.33)
$
(1.02)
$
(1.55)
$
(2.67)
$
(2.04)
2012
2011
2010
2009
2008
Cash and cash equivalents, marketable
securities
$
89,650
$
64,708
$
128,869
$
57,488
$
125,531
Working capital (deficit)
$
17,171
$
754
$
39,367
$
(5,378)
$
66,346
Total assets
$
108,073
$
89,374
$
159,179
$
95,055
$
163,077
Long-term debt, net of discount
$
92,256
$
91,540
$
112,825
$
83,170
$
35,355
Total stockholders' equity (deficit)
$
(85,806)
$ (130,858)
$ (116,678)
$
(73,701)
$
38,027
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations contains
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995,
including statements about our expectations related to the progress and success of drug discovery
activities conducted by Array and by our collaborators, our ability to obtain additional capital to fund our
operations and/or reduce our research and development spending, realizing new revenue streams and
obtaining future out-licensing collaboration agreements that include up-front, milestone and/or royalty
payments, our ability to realize up-front, milestone and royalty payments under our existing or any future
agreements, future research and development spending and projections relating to the level of cash we
expect to use in operations, our working capital requirements and our future headcount requirements. In
some cases, forward-looking statements can be identified by the use of terms such as ``may,'' ``will,''
``expects,'' ``intends,'' ``plans,'' ``anticipates,'' ``estimates,'' ``potential,'' or ``continue,'' or the negative
thereof or other comparable terms. These statements are based on current expectations, projections and
assumptions made by management and are not guarantees of future performance. Although we believe
that the expectations reflected in the forward-looking statements contained herein are reasonable, these
expectations or any of the forward-looking statements could prove to be incorrect and actual results could
differ materially from those projected or assumed in the forward-looking statements. Our future financial
condition, as well as any forward-looking statements are subject to significant risks and uncertainties,
including but not limited to the factors set forth under the heading ``Risk Factors'' in Item 1A of this Annual
Report on Form 10-K for the fiscal year ended June 30, 2012. All forward looking statements are made as
of the date hereof and, unless required by law, we undertake no obligation to update any forward-looking
statements.
The following discussion of our financial condition and results of operations should be read in conjunction
with the financial statements and notes to those statements included elsewhere in this Annual Report.
Our fiscal year ends on June 30. When we refer to a fiscal year or quarter, we are referring to the year in
which the fiscal year ends and the quarters during that fiscal year. Therefore, fiscal 2012 refers to the
fiscal year ended June 30, 2012.
Overview
We are a biopharmaceutical company focused on the discovery, development and commercialization of
targeted small-molecule drugs to treat patients afflicted with cancer and inflammatory diseases. We are
building late-stage development capabilities, with two wholly-owned programs, ARRY-614 and
ARRY-520, and three partnered programs, Selumetinib partnered with AstraZeneca, MEK162 partnered
with Novartis, and Danoprevir, an NS3 protease inhibitor, partnered with InterMune / Roche, having the
potential to advance into registration trials by the end of 2013.
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