Stock Alert for Arena Pharmaceuticals Inc. (ARNA)
  • Stock Alert for Arena Pharmaceuticals Inc. (ARNA)
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    Biotech Stock on Watch: Arena Pharmaceuticals Inc. (ARNA)

    Biotech Stock on Watch: Arena Pharmaceuticals Inc. (ARNA)

    Shares of Arena Pharmaceuticals Inc. (Nasdaq: ARNA) continued their gains from the previous two sessions, adding 11.3% to close Monday’s trade at $1.77.  Over 13 million shares traded hands during the session, topping the 10-day average of 2.11 million.

    Arena shares have gained 8.6% in the last five days, though the stock dropped 5.4% in the last month. Year-to-date, the stock is up 8.6%.

    San Diego, Calif.-based Arena is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing oral drugs that target G protein-coupled receptors (GPCRs), 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. The company submitted a New Drug Application (NDA) for lorcaserin to the U.S. Food and Drug Administration (FDA) for regulatory approval in December 2009. The FDA then issued a complete response letter (CRL) in October 2010, outlining non-clinical and clinical reasons for its decision to not approve the drug, and provided recommendations relating to addressing the issues it raised in the CRL.  In January 2010, the Company completed an end-of-review meeting with the FDA for the locaserin NDA, which resulted in additional requirements.

    On January, Arena and partner Eisai announced that the FDA has accepted, for filing and review, Arena’s resubmission of the NDA for its obesity drug. The FDA considers the resubmission a complete, class 2 response.

    The company announced the submission of its response to the FDA’s CRL a week earlier, which includes data and analyses that were not incorporated in the original NDA, including the results of its Phase III BLOOM-DM (Behavioral modification and Lorcaserin for Overweight and Obesity Management in Diabetes Mellitus) clinical trial, which evaluated lorcaserin for weight loss in patients with type II diabetes. The FDA target action date is set for June 27, 2012.

    Also recently, Arena agreed to sell over 9.95 million shares of its common stock, at a price of $1.65775 per share, and about  9,953 shares of its Series D Convertible Preferred Stock, at a price of $1,657.75 per share, in a registered direct public offering to entities affiliated with healthcare investment organization Deerfield Management.

    The Company expected to receive gross proceeds of around $33 million from the offering, $5 million of which will be used to prepay a portion of the loan principal that otherwise would have been required to be repaid in June 2013 under the existing facility agreement between Arena and Deerfield.

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