After reporting comprehensive findings from its major study of obesity drug lorcaserin 11 days ago, San Diego’s Arena Pharmaceuticals (NASDAQ: ARNA) said today it has arranged $100 million in debt financing with Deerfield Management, a significant shareholder.
That should provide the means for Arena to take the drug through the FDA drug review process. In a statement released this morning, Arena CEO Jack Lief says, “This funding will put us in a stronger financial position as we complete the lorcaserin Phase 3 pivotal program and prepare its NDA submission while advancing our various partnering discussions for lorcaserin and our earlier-stage drug candidates.” NDA stands for New Drug Application.
Deerfield Partner Howard Furst cited lorcaserin’s clean safety profile as “the single most important variable in the approval and broad usage of drugs” for the burgeoning population of overweight people in the U.S. In a comment that seemed to be aimed at investors, Furst added, “The value of Arena, however, goes beyond this important drug candidate to the company’s niacin receptor program with Merck, its diabetes program with Johnson & Johnson and its ability to discover, develop and partner additional compounds.”
Under terms of the credit facility, Deerfield, a New York-based healthcare investment firm, will provide Arena with $100 million, to be repaid within four years. The San Diego drug developer will issue Deerfield warrants for 28 million shares at a price of $5.42 a share.