AtheroGenics lowers 2006 guidance for net cash use by $5 million, reports $10.3 million in Q3 revenue

By Jennifer Lanning Drey

Portland, Ore., Oct. 24 - AtheroGenics, Inc. has lowered its guidance for expected net cash use in 2006 by $5 million to a range of $30 million to $35 million, Mark P. Colonnese, the company's chief financial officer, said during a company conference call on Tuesday.

AtheroGenics ended the third quarter with $172 million in cash, cash equivalents and short-term investments.

The reduced net cash spend is the result of final negotiated contractual agreements with vendors, Colonnese said.

During the quarter, AtheroGenics began site close-down activities for the Arise trial, and the company remains on track to report top-line results from the trial in early 2007, Russell M. Medford, AtheroGenics' president and chief executive officer, said during Monday's call.

"We are truly in the homestretch now. With success, Arise very well could be considered a landmark trial that ushers in a new approach to the treatment of heart disease," Medford said.

The pivotal phase 3 Arise trial is evaluating AtheroGenics' lead compound, AGI-1067, as an oral therapy for treatment of atherosclerosis in collaboration with AstraZenica.

The unveiling of the results could define AtheroGenics for the next several years, Medford said.

The company has formed a marketing group and commercial manufacturing transition team in anticipation of positive trial results, he said.

For the third quarter, AtheroGenics reported revenues of $10.3 million, compared to no revenues in 2005.

All of the company's revenue in the third quarter came from the AGI-1067 collaboration with AstraZeneca, and most represents amortization of a $50 million upfront license fee received from AstraZeneca in February.

That amortization will continue for the next five quarters at a rate of $6.25 million per quarter, Colonnese said.

AtheroGenics reported a net loss of $14.4 million, or $0.36 per share, for the third quarter, compared with a net loss of $23.1 million, or $0.61 per share, during the same period in 2005.

Atlanta-based AtheroGenics is a pharmaceutical company focused on the treatment of chronic inflammatory diseases.

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