From now on, you can scratch any lingering rep Arena Pharmaceuticals $ARNA had as an obesity-focused biotech. Four-and-a-half years after the FDA approved its weight drug Belviq for marketing, and long after visions of blockbuster sales vanished like a mirage, the biotech has sold off rights to the drug to its partner Eisai and backed away from any remaining financial commitment for further trial work.
Right on cue, Arena also filed a $50 million ATM Wednesday afternoon.
In its place Arena will take a promise for up to $26 million in commercial milestones and redirect about $80 million it estimates were earmarked for Belviq. That money will now be put it in service of three mid-stage drugs in its pipeline. There’s another $23 million in support payments and a 31.5% royalty will be replaced with royalty payments of 9.5% on annual global net sales of lorcaserin less than or equal to $175 million, 13.5% on annual global net sales greater than $175 million but less than or equal to $500 million and 18.5% on annual global net sales greater than $500 million.
Quarterly sales and royalties for the drug, though, have been in decline.
The move completes a shift set in motion by CEO Amit Munshi, who stepped in last spring just as his former biotech — the biosimilar manufacturer Epirus — was about to crash and burn. Munshi has already reorganized Arena, laying off 120 full time positions; the biotech now has about 50 staffers for its development mission. And Munshi’s set to look to four data readouts on Arena’s wholly-owned or partnered assets.
Their top clinical program is for etrasimod (APD334), which Munshi describes as the “second S1P modulator behind Receptos (ozanimod),” bought out by Celgene for more than $7 billion. Phase II data is due in late 2017. Ralinepag (ADP811) will deliver mid-stage data on pulmonary arterial hypertension later in the year. And their cannabinoid 2 receptor agonist for Crohn’s pain wraps the in-house pipeline. Nelotanserin, a 5-HT2A inverse agonist, is partnered with Axovant for dementia associated psychosis.
If you look back at the wave of obesity drugs nearing the FDA at the same time in 2012, Munshi tells me, each was linked by “some analyst with billion-plus peak sales. Each are sub-$50 million today.” Lingering safety concerns from an earlier generation of weight drugs created an overhang of concerns that Arena and Eisai were never able to shake, says the CEO. Payers never stepped up with a commitment to reimburse for the drugs. But he says he still believes that Eisai can turn it around, looking for more data from a longterm cardio outcome trial.
Now, though, the new, slimmed down mission at Arena will be minus the weight of Belviq.
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