Arena Pharma Takes Center Stage With Pfizer’s $6.7B Cash Buyout

Source: Streetwise Reports   12/13/2021

Arena Pharmaceuticals shares traded 80% higher after the company reported it agreed to be acquired by Pfizer Inc. for $100.00 per share in cash in a deal valued at $6.7 billion.

Clinical stage pharmaceutical company Arena Pharmaceuticals Inc. (ARNA:NASDAQ), today announced that it entered into a definitive agreement to be acquired by global biopharma company Pfizer Inc. (PFE:NYSE) in an all-cash transaction for $100 per share, or approximately $6.7 billion.

Arena has a large development pipeline and is presently conducting over a dozen Phase 2 and Phase 3 clinical trials in the areas of gastroenterology, dermatology, cardiology and immuno-inflammatory diseases.

The report pointed out that the list includes the company’s leading therapeutic candidate, etrasimod, which the company describes as “an oral, selective sphingosine 1-phosphate (S1P) receptor modulator currently in development for a range of immuno-inflammatory diseases including gastrointestinal and dermatological diseases.”

“We’re delighted to announce Pfizer’s proposed acquisition of Arena.”

Amit D. Munshi, Arena Pharmaceuticals’ President and CEO

Mike Gladstone, Global President & General Manager, Pfizer Inflammation and Immunology, commented, “The proposed acquisition of Arena complements our capabilities and expertise in Inflammation and Immunology, a Pfizer innovation engine developing potential therapies for patients with debilitating immuno-inflammatory diseases with a need for more effective treatment options…Utilizing Pfizer’s leading research and global development capabilities, we plan to accelerate the clinical development of etrasimod for patients with immuno-inflammatory diseases.”

Arena is highly focused on development of etrasimod, which is currently being evaluated in two separated Phase 3 ulcerative colitis (UC) studies, a Phase 2/3 Crohn’s Disease program and a Phase 2 eosinophilic esophagitis study. In the dermatology area, the company has a planned Phase 3 program in atopic dermatitis and an ongoing Phase 2 study in alopecia areata.

The company mentioned that in the randomized Phase 2 OASIS study of etrasimod in moderate to severe UC patients, the majority of patients given etrasimod 2 mg achieved clinical response, clinical remission, or endoscopic improvement at week 12 and demonstrated sustained or improved effects up to week 46. The firm noted that the findings from the OASIS trial offer hope to UC patients who have not achieve positive responses to other conventional or advanced therapies. Arena stated that the data collected from the OASIS study is providing the basis and support for its Phase 3 ELEVATE UC 52 and UC 12 trials. The firm advised that each of these trials are now fully enrolled with the first data readouts expected in 2022.

Arena additionally has two development-stage cardiovascular assets in its drug pipeline called, temanogrel and APD418. The firm advised that, “temanogrel is currently in Phase 2 for the treatment of microvascular obstruction and Raynaud’s phenomenon secondary to systemic sclerosis and APD418 is currently in Phase 2 for acute heart failure.”

Arena Pharmaceuticals’ President and CEO Amit D. Munshi remarked, “We’re delighted to announce Pfizer’s proposed acquisition of Arena, recognizing Arena’s potentially best in class S1P molecule and our contribution to addressing unmet needs in immune-mediated inflammatory diseases…Pfizer’s capabilities will accelerate our mission to deliver our important medicines to patients. We believe this transaction represents the best next step for both patients and shareholders.”

The report indicated that each company’s respective boards of directors have already unanimously approved the buyout transaction. The transaction remains subject to approval by Arena’s shareholders, along with ordinary closing conditions and regulatory approvals. The report stated that Pfizer expects to finance the transaction to buy 100% of Arena’s outstanding shares using its existing cash on hand.

Arena Pharmaceuticals is a biopharmaceutical company based in San Diego, Calif. The firm has an advanced diversified portfolio of therapeutic candidates targeting gastroenterology, dermatology, and cardiology. The company is endeavoring to develop medicines to address unmet needs in the treatment of inflammatory bowel disease, irritable bowel syndrome, and eosinophilic esophagitis. The firm is also looking to develop therapeutics for treating dermatological conditions such as atopic dermatitis and alopecia and is exploring ways to treat acute heart failure and coronary microvascular obstruction and other cardiovascular conditions. At present, none of the company’s investigational compounds including etrasimod, temanogrel and APD418 have been approved for any medical use in any country.

Pfizer is headquartered in New York, N.Y. and is a research-based global biopharma company involved in the discovery, development and manufacture of pharmaceuticals and other healthcare products. The company is now highly focused on development of its mRNA vaccines for SARS-CoV-2 with its partner BioNTech SE. Its global portfolio includes many well-known brand prescription medications including Celebrex, Eliquis, Lipitor, Prevnar 13, Pristiq, Viagra and Xeljanz. Pfizer has a market cap of greater than $295 billion and its shares trade on the NYSE.

Arena Pharmaceuticals started off the day with a market cap of around $3.16 billion with approximately 61.33 million shares outstanding and a short interest of about 3.0%. ARNA shares opened 86% higher today on the news at $93.090 (+$43.15, +86.40%) over Friday’s $49.94 closing price and reached a new 52-week high price this morning of $97.0799. The stock has traded today between $89.50 and $94.0799 per share and is currently trading at $89.99 (+$40.05, +80.20%).

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