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Highlights
- Arena Pharmaceuticals (ARNA) was founded in 1997 and had its IPO in 2000.
- Pfizer (PFE) is buying Arena Pharmaceuticals for US$6.7 billion in an all-cash deal.
- Arena’s ulcerative colitis treatment candidate, etrasimod, is in a late-stage study.
Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) jumped 95.98% in pre-market, Monday, December 13, after the news of Pfizer acquiring Arena came in. The ARNA stock traded high at US$97.87 at 6:48 am ET.
On December 12, 2021, Arena entered into an agreement with Pfizer Inc. for a merger. Pfizer is to acquire Arena Pharmaceuticals, Inc. through a definitive agreement. The acquisition is an all-cash deal and costs Pfizer US$6.7 billion, as per the regulatory filing with SEC on form 8-K, Monday.
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Deal Details:
Pfizer will take Arena shares at US$100 apiece. Arena has Guggenheim Securities LLC and Evercore Group LLC as advisors for this deal, and BofA Securities and Centerview Partners LLC will work for Pfizer as financial advisors. The deal is aimed to expand the cancer and inflammatory disease treatment pipeline of Pfizer after the acquisition.
San Diego, California-based Arena is a biotechnology company engaged in developing treatments for gastroenterology, dermatology and cardiology and delivering novel and transformational medicines with optimized pharmacology and pharmacokinetics for patients across the world.
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Arena’s ulcerative colitis treatment candidate, etrasimod, is in a late-stage study. The company is commercialized under the brand name Belviq.
Arena Biotechnology has a market capitalization of US$5.6 billion. The stock closed at US$49.94 on December 10, 2021. It traded in the range of US$85.00 to US$45.50 in the last 52 weeks.
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Financials:
The healthcare company didn't earn any revenue for the three months ended September 30, 2021. The net loss booked for the quarter ending in September 2021 was US$196 million or US$3.21 per share diluted compared to the net loss of US$97.4 million or US$(1.69) per share diluted in the corresponding period in 2020.
The company had cash and cash equivalent of US$386.6 million as of September 30, 2021, versus US$219.5 million as of December 31, 2020.
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Bottom line:
Arena Biotechnology is not an old player in the sector. It didn’t generate revenue in the last quarter; however, the company has been able to discover drugs internally. One of them is lorcaserin, which is approved in the US and South Korea. Investors must diligently check all the factors before investing in stocks.
