Arena Pharmaceuticals Announces New Strategic Focus and Cost Reduction Plan

- Strategic priorities include clinical-stage pipeline and core research function -

27 Oct, 2015, 16:00 ET from Arena Pharmaceuticals, Inc.

SAN DIEGO, Oct. 27, 2015 /PRNewswire/ -- Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) today announced plans to improve efficiencies and reduce costs as it focuses on the advancement of its research and development priorities.

Arena intends to focus on its key strengths by concentrating near-term activities and resources primarily on:

  • advancing its APD334 program, including the ongoing Phase 2 clinical trial for ulcerative colitis, and potentially exploring additional indications beyond inflammatory bowel disease through small pilot studies;
  • advancing its ralinepag (formerly known as APD811) program, including its ongoing Phase 2 clinical trial for pulmonary arterial hypertension (PAH), and potentially exploring enhanced efficacy with other classes of PAH agents;
  • advancing its APD371 program through a Phase 1 multiple-ascending dose clinical trial;
  • supporting Eisai to advance the MACE, diabetes conversion, MACE plus and other endpoints of the ongoing BELVIQ® (lorcaserin HCl) cardiovascular outcomes trial (CVOT), also known as the CAMELLIA study, and seeking potential regulatory approval for BELVIQ XR®, a once-daily formulation of BELVIQ;
  • maintaining its core research function to discover and advance drug candidates;
  • assessing strategic collaboration opportunities for certain clinical- and earlier-stage programs; and
  • meeting manufacturing obligations to collaborators and others, while reducing commercial manufacturing overhead to achieve potential savings.

As part of this initiative, Arena will reduce its US workforce by approximately 80 employees or 35%, which Arena estimates will reduce annualized cash expenditures for personnel by approximately $11.0 million. Arena plans to implement additional cost control measures to further reduce its expenditures, including reductions at its Swiss manufacturing facility, Arena Pharmaceuticals GmbH.

"This initiative supports our strong desire to create a more streamlined and efficient organization focused on key priorities designed to add both near- and long-term value to the organization," said Harry F. Hixson, Jr., Arena's interim Chief Executive Officer. "We believe our clinical-stage pipeline, including the MACE plus portion of the CAMELLIA study, offer tremendous promise, and we are committed to generating clinical data supporting meaningful differentiation of our compounds from currently available therapies. We thank all of our employees who were affected by today's announcement for their contributions to Arena."

As a result of the US workforce reduction, which is planned to be completed by December 31, 2015, Arena estimates it will incur restructuring charges, primarily in the fourth quarter of 2015, of approximately $3.3 million in connection with one-time employee termination costs, including severance and other benefits.

As part of this initiative, Arena does not intend to currently advance certain lifecycle management programs for lorcaserin, including evaluating lorcaserin in combination with phentermine and for smoking cessation. Feedback from the US Food and Drug Administration regarding a lorcaserin and phentermine combination for weight management indicated that a full development program would be required, including a factorial design Phase 2 study and two, 1-year Phase 3 studies. In addition, with respect to lorcaserin's potential for smoking cessation, there are market-specific challenges that might limit the potential return on the investment required to advance a development program for this indication.

Arena expects to discuss its new strategic focus and cost reduction plan during its upcoming quarterly conference call.

About Arena Pharmaceuticals

Arena embraces the challenge of improving health by seeking to bring innovative medicines targeting G protein-coupled receptors to patients. Arena's focus is discovering, developing and commercializing drugs to address unmet medical needs, and BELVIQ® (lorcaserin HCl) is Arena's first internally discovered drug approved for marketing. Arena has US operations located in San Diego, California, and operations outside of the United States, including its commercial manufacturing facility, located in Zofingen, Switzerland. For more information, visit Arena's website at www.arenapharm.com.

Arena Pharmaceuticals® and Arena® are registered service marks of Arena Pharmaceuticals, Inc. BELVIQ® and BELVIQ XR® are registered trademarks of Arena Pharmaceuticals GmbH.

Forward-Looking Statements

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 reduction of Arena's workforce, including the expected size, timing, related charges and benefits, and other expected impact of such reduction; Arena's focus, plans and strategy, including with respect to research, development, regulatory, and collaborations, and related activities, benefits, outcome and expectations; the advancement and potential of Arena's research and development programs; seeking potential regulatory approval of BELVIQ XR; activities with Eisai; assessing strategic collaboration opportunities; meeting manufacturing obligations; implementing additional cost control measures; reducing expenditures and achieving savings; embracing the challenge of improving health; seeking to bring innovative medicines to patients; and Arena's focus, plans, goals, strategy, expectations, research and development programs, and ability to discover and 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, the following: the risk that the cost and other negative effects related to the reduction of Arena's workforce may be greater than anticipated; the risk that Arena may not realize the benefits expected from the workforce reduction or other cost control measures; risks related to commercializing drugs, including regulatory, manufacturing, supply and marketing issues and the availability and use of BELVIQ or lorcaserin; cash and revenues generated from BELVIQ, including the impact of competition; the risk that Arena's revenues are based in part on estimates, judgment and accounting policies, and incorrect estimates or disagreement regarding estimates or accounting policies may result in changes to Arena's guidance or previously reported results; the timing and outcome of regulatory review is uncertain, and lorcaserin may not be approved for marketing in combination with another drug, for another indication or using a different formulation or in any other territory for any indication; regulatory decisions in one territory may impact other regulatory decisions and Arena's business prospects; government and commercial reimbursement and pricing decisions; risks related to relying on collaborative arrangements; the timing and receipt of payments and fees, if any, from collaborators; the entry into or modification or termination of collaborative arrangements; unexpected or unfavorable new data; nonclinical and clinical data is voluminous and detailed, and regulatory agencies may interpret or weigh the importance of data differently and reach different conclusions than Arena or others, request additional information, have additional recommendations or change their guidance or requirements before or after approval; data and other information related to any of Arena's research and development may not meet regulatory requirements or otherwise be sufficient for (or Arena or a collaborator may not pursue) further research and development, regulatory review or approval or continued marketing; Arena's and third parties' intellectual property rights; the timing, success and cost of Arena's research and development and related strategy and decisions; 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 expected or at all; having adequate funds; and satisfactory resolution of litigation or other disagreements with others. 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.

Contact: Arena Pharmaceuticals, Inc.

Craig M. Audet, Ph.D., Senior Vice President, Operations & Head of Global Regulatory Affairs caudet@arenapharm.com  858.453.7200, ext. 1612

www.arenapharm.com

 

SOURCE Arena Pharmaceuticals, Inc.



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