Arena Pharm (ARNA) Update Jan 6, 2017

With the announcement of the formation of Beacon Discovery, Inc. in September 2016, the investment community is not impressed.  

This strategic move was to move away from the Belviq franchise (sales has not live up to expectations) and focus on the development of pipeline candidates; namely:

1. APD334, Etrasimod, for IBD (in Ph 2),

2. APD811,Ralinepeg, for PAH (in Ph 2),

3. APD371 for pain in Crohn’s disease (Ph 2)
4. APD791, Temanogrel in treatment of thrombotic diseases.

5. Other collaborations with Axovant Sciences (Ph 2) and Boehringer Ingelheim (Preclinical)

On 1/4/17, an amendment of its BELVIQ® (lorcaserin HCl) marketing and supply agreement with Eisai Co., Ltd. and Eisai Inc.

Under the amendment, an agreement was entered whereby Eisai is granted license to certain patents, regulatory approvals, samples, records, know-how related to BELVIQ, trademarks (including the trademarks BELVIQ, BELVIQ XR and VENESPRI), our agreements with distributors of BELVIQ.  .Assign its rights under the agreements with Ildong Pharmaceutical Co. LTD., Abic Marketing Limited and CY Biotech Company Limited to Eisai  In essence, Eisai will be solely responsible for Belviq.

In exchange Arena (via it’s wholly owned subsidiary, 356 Royalty Inc.) will

1. Receive royalty payments as follows:
1. Royalty rates range from:
1. 9.5% on annual global net sales less than or equal to $175 million,
2. 13.5% on annual global net sales greater than $175 million but less than or equal to $500 million and
3. 18.5% on annual global net sales greater than $500 million.
2. Eligible to receive milestone payments of $25M for Sales (reaching $250M in any 12 mo) and $1M for regulatory approval in Brazil (which was approved in 12/19/16 by  Brazilian Health Surveillance Agency (ANVISA)
3. Arena will have estimated costs savings of $80M related to Lorcaserin development obligations