Eisai Gets Exclusive U.S. Rights To Market Arena's Obesity Drug Lorcaserin - Update

Arena Pharmaceuticals Inc. (ARNA) Thursday said that its obesity drug lorcaserin upon approval by the Food and Drug Administration will be marketed in the United States by Japanese health care company Eisai Inc. under a marketing and supply agreement signed by the two companies.

The deal valued at more than $1.37 billion grants Eisai exclusive U.S. rights to commercialize lorcaserin. Arena will manufacture lorcaserin at its facility in Switzerland and sell finished product to Eisai for marketing and distribution in the United States.

As per the terms of the agreement, Arena would receive an upfront payment of $50 million from Eisai and, upon regulatory approval and the delivery of product supply for launch, up to an additional $90 million in milestone payments. Arena is also eligible to receive $1.16 billion in one-time purchase price adjustment payments based on annual sales levels of lorcaserin and up to an additional $70 million in regulatory and development milestone payments.

Arena will sell lorcaserin to Eisai for a purchase price starting at 31.5% of Eisai's annual net product sales, and the purchase price will increase on a tiered basis to as high as 36.5% on the portion of annual net product sales exceeding $750 million.

Arena filed its New Drug Application for lorcaserin with the FDA last December. An advisory panel to the regulatory agency is scheduled to review the NDA for lorcaserin on September 16, 2010. The FDA is expected to make a final decision on the drug on October 22, 2010.

Commenting on the deal with Eisai, Jack Lief, Arena's president and chief executive officer said, "With Eisai, we have the right company to market lorcaserin in the United States, the right type of agreement to optimize lorcaserin's medical and commercial potential and the shared recognition that it is the right time to enter into this agreement to prepare for launch following FDA approval."

Obesity is one of the most serious public health problems. Being obese increases the risk of diabetes, heart disease, stroke, arthritis and some cancers. Studies have shown that weight loss of 5% to 10% can delay or prevent some of these diseases.

According to World Health Statistics 2010 published by World Health Organization, one third of the U.S. adults (male: 31.1%, female: 33.2%) were obese for the period 2000-2009.

ARNA closed Wednesday's regular trading at $3.07 per share on the Nasdaq. In pre-market trading Thursday, the stock is up 20% at $3.70.

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