Financial Aspects
In 2010, Arena Pharmaceuticals attended multiple biotechnology and pharmaceutical conferences and hosted several conference calls to discuss the Phase III results released so far. Market reaction to these results had been confused, driving Arena's stock (NASDAQ: ARNA) price to a high of over $7.00 in early 2009, and to a low of $2.61 in mid-2010. While management had stated its desire to partner lorcaserin with a large pharmaceutical company, in 2010 it raised money from private investors two separate times, raising a total of nearly $60 million dollars. On 3 June 2010, management began to discuss the possibility of a go-it-alone strategy. Piper Jaffray has forecast lorcaserin sales of $3 billion dollars in 2015. Arena has a very close financial relationship with a group of private funds under the Deerfield umbrella name (Deerfield Private Design Fund, L.P., Deerfield Private Design International, L.P., Deerfield Partners, L.P., Deerfield International Limited, Deerfield Special Situations Fund, L.P., and Deerfield Special Situations Fund International Limited) under which Deerfield has lent Arena $100 million dollars, purchased 11 million shares, and holds 28 million warrants to purchase additional shares at prices ranging from $3.23 to $5.48. On 15 September 2010 shares of Arena fell nearly 40%, from $6.85 to $4.13, on news that the lorcaserin has been linked to formation of malignant tumors in rats. On 16 September, an FDA advisory panel voted 9 to 5 to recommend against approval of the drug based on concerns over both safety and efficacy, trading on Arena's stock was stopped on that date, but after hours, the stock price fell about 40 percent.
Read more about this topic: Lorcaserin
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