Drug giant Pfizer has inked a deal to buy Arena Pharmaceuticals in an all-cash deal valued at $6.7 billion — boosting its capabilities to develop therapies targeting ulcerative colitis, Crohn's disease and other ailments around immuno-inflammation.
Arena's executive offices are based in Park City, Utah. But one of the company's main clinical hubs is located in San Diego. For years, Arena was headquartered locally but moved as it repositioned after an obesity drug failed to gain market traction.
Founded in 1997, Arena employs about 360 workers mostly in San Diego, Boston and Switzerland. Under terms of the buyout, Pfizer will pay $100 per share for Arena. The pharmaceutical giant has nearly $28 billion in cash as sales of its COVID-19 vaccine have increased revenue.
The boards of directors of both companies have unanimously approved the transaction. But it still must be cleared by regulators, where it could face hurdles. Arena stockholders must also approve the deal.
Arena's shares soared on the news. They ended trading Friday $49.94 but closed on Monday at $90.08 — an 80 percent gain. Pfizer's shares also were up nearly 5 percent.
According to Pfizer, Arena brings it a portfolio of diverse development-stage drug candidates in gastroenterology, dermatology and cardiology.
Arena's top candidate is etrasimod, an oral therapy for immuno-inflammatory diseases. It is in Phase 3 studies now for ulcerative colitis and a Phase 2/3 program in Crohn's disease.
There's also a planned Phase 3 program in atopic dermatitis. And Phase 2 studies are ongoing in eosinophilic esophagitis, which can damage the throat and lead to difficulty swallowing, and alopecia areata, which causes hair loss in clumps.
"Utilizing Pfizer's leading research and global development capabilities, we plan to accelerate the clinical development of etrasimod for patients with immuno-inflammatory diseases," said Mike Gladstone, global head of Pfizer Inflammation and Immunology.
In addition, Arena's pipeline includes two earlier-stage cardiovascular treatments. The first, temanogrel, is in Phase 2 studies for the treatment of smaller artery obstruction and Raynaud's phenomenon, which can result in numbness in fingers, toes and other extremities. Another candidate, APD418, is in Phase 2 studies for acute heart failure.
"Pfizer's capabilities will accelerate our mission to deliver our important medicines to patients," said Amit D. Munshi, president and chief executive of Arena. "We believe this transaction represents the best next step for both patients and shareholders."