Arena Lines Up $100 Million in Final Push for Obesity Drug

After reporting comprehensive findings from its major study of obesity drug lorcaserin 11 days ago, San Diego’s Arena Pharmaceuticals (NASDAQ: [[ticker:ARNA]]) said today it has arranged $100 million in debt financing with Deerfield Management, a significant shareholder.

That should provide the means for Arena to take the drug through the FDA drug review process. In a statement released this morning, Arena CEO Jack Lief says, “This funding will put us in a stronger financial position as we complete the lorcaserin Phase 3 pivotal program and prepare its NDA submission while advancing our various partnering discussions for lorcaserin and our earlier-stage drug candidates.” NDA stands for New Drug Application.

Deerfield Partner Howard Furst cited lorcaserin’s clean safety profile as “the single most important variable in the approval and broad usage of drugs” for the burgeoning population of overweight people in the U.S. In a comment that seemed to be aimed at investors, Furst added, “The value of Arena, however, goes beyond this important drug candidate to the company’s niacin receptor program with Merck, its diabetes program with Johnson & Johnson and its ability to discover, develop and partner additional compounds.”

Under terms of the credit facility, Deerfield, a New York-based healthcare investment firm, will provide Arena with $100 million, to be repaid within four years. The San Diego drug developer will issue Deerfield warrants for 28 million shares at a price of $5.42 a share.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.