Arena Pharmaceuticals to Receive $35.5 Million from Deerfield Management
SAN DIEGO, June 3, 2010 /PRNewswire-FirstCall/ -- Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) announced today that it has entered into an agreement with Deerfield Management, a leading healthcare investment organization, to provide Arena with approximately $35.5 million through an equity investment.
Under the terms of this financing, Arena will receive gross proceeds of approximately $35.5 million from the sale of 11 million shares of its common stock to Deerfield at a price of $3.23 per share. In addition, the exercise price of 16.2 million of the 28 million outstanding warrants to purchase common stock that Deerfield previously received in connection with a June 2009 loan to Arena will be reduced from $5.42 to $3.45 per share. These 16.2 million warrants cannot be exercised for six months from the closing of this financing, which is subject to customary closing conditions.
"We are pleased that Deerfield continues to support our efforts as we seek to obtain FDA approval of lorcaserin," stated Jack Lief, Arena's President and Chief Executive Officer. "Our intention remains to establish an agreement with a pharmaceutical company to commercialize lorcaserin. This funding puts us in a stronger financial position as we continue to pursue this goal and progress towards lorcaserin's Advisory Committee meeting and PDUFA date."
"Lorcaserin's profile provides the potential for the drug candidate to be a first-line agent for weight management. We are committed to ensuring that Arena is well capitalized as it evaluates collaborative opportunities to commercialize lorcaserin," commented James E. Flynn, General Partner, Deerfield Management.
About Arena Pharmaceuticals
Arena is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing oral drugs that target G protein-coupled receptors, an important class of validated drug targets, in four major therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases. Arena's most advanced drug candidate, lorcaserin, is intended for weight management, including weight loss and maintenance of weight loss, and has completed a pivotal Phase 3 clinical trial program. Arena has filed an NDA for lorcaserin, and the FDA has assigned a PDUFA date of October 22, 2010, for review of the application.
Arena Pharmaceuticals® and Arena® are registered service marks of the company.
Certain statements in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements include statements about the closing of the equity financing, receipt of proceeds from the sale of common stock and other expectations relating to the financing; any future funding from Deerfield; the advancement, therapeutic indication and use, safety, efficacy, tolerability and regulatory review and approval of lorcaserin; intention to establish an agreement to commercialize lorcaserin and evaluation of collaborative opportunities; lorcaserin's commercial and other potential, including to be a first-line agent for weight management; the Advisory Committee meeting and the timing for the FDA to complete its review of the lorcaserin NDA; and Arena's focus, goals, strategy, research and development programs, and ability to develop compounds and commercialize drugs. For such statements, Arena claims the protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from Arena's expectations. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, regulatory authorities or advisors may not find data from Arena's clinical trials and other studies sufficient for regulatory approval; the timing and ability of Arena to receive regulatory approval for its drug candidates; the timing, success and cost of Arena's lorcaserin program and other of its research and development programs; results of clinical trials and other studies are subject to different interpretations and may not be predictive of future results; clinical trials and other studies may not proceed at the time or in the manner Arena or others expect or at all; Arena's ability to enter into agreements to develop or commercialize its compounds or programs; Arena's ability to commercialize lorcaserin with a pharmaceutical company or independently; the risk that the equity financing with Deerfield may not be completed when expected or at all; the lack of obligations of Deerfield to provide future capital to Arena; Arena's ability to obtain adequate funds; Arena's ability to obtain and defend its patents; and the timing and receipt of payments and fees, if any, from Arena's collaborators. Additional factors that could cause actual results to differ materially from those stated or implied by Arena's forward-looking statements are disclosed in Arena's filings with the Securities and Exchange Commission. These forward-looking statements represent Arena's judgment as of the time of this release. Arena disclaims any intent or obligation to update these forward-looking statements, other than as may be required under applicable law.