Arena Raises More Cash For Obesity Drug Efforts
Arena Pharmaceuticals has said that if it can't find a partner for bringing its experimental obesity drug lorcaserin to market, it plans to go it alone. Today the company announced a deal that will give them $35.5 million, which will certainly help should that come to pass.
The agreement is with Deerfield Management Company, a privately owned hedge fund sponsor that mainly invests in the healthcare area.
This is good news for Arena, Leerink Swann analyst Steve Y. Yoo said in a report to investors. The influx of funds should allow Arena to operate into the 2nd quarter of 2011 without any further financing, he says.
This funding might also come in handy because FDA's endocrinologic and metabolic division, which will evaluate lorcaserin, is in for a busy October, Yoo adds. Not only is another experimental obesity drug, Vivus's Qnexa, on the docket, there are two other drug candidates to be dealt with as well. Minor delays in the regulatory process might crop up because of this backlog, he says, and the funding provides a cushion for Arena in case delays do happen.
However, Yoo says that "the best source of funding, in our view, would be an upfront payment by a partner for lorcaserin."
But will that happen? Adam Feuerstein, senior columnist at TheStreet., doesn't think so, and he's not holding out hope for Arena's competitors in the obesity drug race either. On Twitter (@adamfeuerstein) this morning he wrote:
$ARNA raises more $ thru Deerfield. WIll $VVUS, $ARNA or $OREX partner before FDA panels/approval decisions? Looking increasingly unlikely.
And in other Arena news: Yesterday the company announced that the FDA advisory panel will discuss lorcaserin on September 16.