Arena cuts 130 after drug data disappoints investors

Hard on the heels of some disappointing late-stage data regarding its lead therapy, San Diego-based Arena Pharmaceuticals is axing 130 staffers--close to a third of its total workforce.

"Given the challenging economic environment, we believe it is necessary to reduce our cash usage and provide Arena with additional financial flexibility to support our expected filing of a New Drug Application, or NDA, for lorcaserin, our drug candidate for weight management that is being investigated in a Phase III clinical trial program, by the end of 2009," the company stated in an SEC filing.

Arena faces some big challenges with lorcaserin. While it reported that the weight-loss drug proved safe and effective in Phase III, investors were less than impressed that the difference in weight loss between the group taking the drug and the placebo arm was not greater than five percent. That news sent Arena's shares into the tank.

- read the report from Xconomy

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