Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) Files An 8-K Results of Operations and Financial Condition

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) Files An 8-K Results of Operations and Financial Condition

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Item2.02 Results of Operations and Financial Condition.

On April17, 2017, we filed a preliminary prospectus supplement
with the Securities and Exchange Commission, or the SEC, in which
we disclosed that we had cash and cash equivalents as of March31,
2017 of $79.5 million, which includes approximately $0.3million
of cash held by Beacon Discovery, Inc., a variable interest
entity.

Item 8.01 Other Events.

We are filing the following information with the SEC for the
purpose of updating certain aspects of our publicly disclosed
descriptions of our business and risk factors, as well as to
provide an update on sales to date under our at-the-market
offering facility.

Overview

We are a biopharmaceutical company focused on developing novel,
small-molecule drugs across a range of therapeutic areas, and are
currently directing our efforts and resources primarily on the
following activities:

Advancing our proprietary clinical programs:
Etrasimod (formerly APD334)an oral, next
generation, selective sphingosine 1-phosphate, or S1P,
receptor modulator targeting the S1P receptor subtypes 1, 4
and 5, which we are evaluating in multiple ongoing Phase 2
clinical trials for:
Ulcerative Colitis, or UC
Dermatological Extra-Intestinal Manifestations, or Derm EIMs,
in Inflammatory Bowel Disease, or IBD
Pyoderma Gangrenosum, or PG, with and without co-morbidities
including IBD

We also intend, in 2017, to initiate an additional trial in
Primary Biliary Cholangitis, or PBC

Ralinepag (formerly APD811)an oral, next
generation, selective IP receptor agonist targeting the
prostacyclin pathway in an ongoing Phase 2 clinical trial for
pulmonary arterial hypertension, or PAH
APD371a highly selective, peripherally
restricted, orally available, full agonist of the
cannabinoid-2 receptor, which we are evaluating in an ongoing
Phase 2 clinical trial for pain associated with Crohns
disease
We continue to explore additional indications for all of our
clinical-stage programs
Supporting our collaborators, including the following:
Eisai Inc. and Eisai Co., Ltd. in their efforts with respect
to BELVIQ
Axovant Sciences Ltd. in its efforts with respect to
nelotanserin, an orally available inverse agonist of the
serotonin 2A receptor, which is in (i) a Phase 2 clinical
trial in Lewy body dementia patients who experience frequent
visual hallucinations, and (ii) a separate Phase 2 clinical
trial to evaluate nelotanserin as a potential treatment for
rapid-eye-movement, or REM, behavior disorder in patients
with dementia with Lewy bodies
Boehringer Ingelheim International GmbH, targeting a G
protein-coupled receptor that belongs to the group of orphan
central nervous system receptors, which is in preclinical
development

Sales under At-The-Market Offering Facility

As previously disclosed, in January 2017 we entered into an
Equity Distribution Agreement, to which we may sell and issue
shares of our common stock having an aggregate offering price of
up to $50 million from time to time in transactions that are
deemed to be at-the-market offering as defined in Rule 415 under
the Securities Act of 1933, as amended, or the Securities Act.

As of April10, 2017, we had sold 4,890,232 shares of our common
stock at an average price of $1.51 per share under the Equity
Distribution Agreement, for aggregate gross proceeds of
$7,358,256 before deducting commissions and other issuance costs.

RISK FACTORS

Investment in our stock involves a high degree of risk. You
should consider carefully the risks described below, together
with other information in this Current Report on Form8-K and
other public filings, before making investment decisions
regarding our stock. If any of the following events actually
occur, our business, operating results, prospects or financial
condition could be materially and adversely affected. This could
cause the trading price of our common stock to decline and you
may lose all or part of your investment. Additional risks facing
our company are described under the heading Risk Factors in our
Annual Report on Form 10-K for the year ended December31, 2016
(Annual Report), as filed with the SEC. Moreover, the risks
described below and in our Annual Report are not the only ones
that we face. Additional risks not presently known to us or that
we currently deem immaterial may also affect our business,
operating results, prospects or financial condition.

Certain Risks and Potential Disadvantages Associated with
Our Proposed Reverse Stock Split

We cannot assure you that our proposed reverse stock
split will increase our stock price.

In connection with our 2017 Annual Meeting of Stockholders
currently scheduled for June13, 2017, we are seeking stockholder
approval for a series of alternate amendments to our Amended and
Restated Certificate of Incorporation to effect, at the option of
our Board of Directors, a reverse stock split of our common stock
at a reverse stock split ratio ranging from one-for-six (1:6)to
one-for-ten (1:10), inclusive, with the effectiveness of one of
such amendments and the abandonment of the other amendments, or
the abandonment of all amendments, to be

determined by our Board of Directors prior to the date of our
2018 Annual Meeting of Stockholders. We expect that a reverse
stock split, if approved and implemented, will increase the
market price of our common stock. However, the effect of a
reverse stock split on the market price of our common stock
cannot be predicted with any certainty, and the history of
reverse stock splits for other companies in our industry is
varied, particularly since some investors may view a reverse
stock split negatively. It is possible that the per share price
of our common stock after a reverse stock split will not increase
in the same proportion as the reduction in the number of our
outstanding shares of common stock following the reverse stock
split, and the reverse stock split may not result in a per share
price that would attract brokers and investors who do not trade
in lower priced stocks. In addition, although we believe a
reverse stock split may enhance the desirability of our common
stock to certain potential investors, we cannot assure you that,
if implemented, our common stock will be more attractive to
institutional or other long term investors. Even if we implement
a reverse stock split, the market price of our common stock may
decrease due to factors unrelated to the reverse stock split. In
any case, the market price of our common stock may also be based
on other factors which may be unrelated to the number of shares
outstanding, including our future performance. If a reverse stock
split is consummated and the trading price of the common stock
declines, the percentage decline as an absolute number and as a
percentage of our overall market capitalization may be greater
than would occur in the absence of the reverse stock split.

Our proposed reverse stock split may decrease the
liquidity of our common stock and result in higher transaction
costs.

The liquidity of our common stock may be negatively impacted by
reverse stock split (if approved and implemented), given the
reduced number of shares that would be outstanding after the
reverse stock split, particularly if the stock price does not
increase as a result of the reverse stock split. In addition, if
a reverse stock split is implemented, it will increase the number
of our stockholders who own odd lots of fewer than 100 shares of
common stock. Brokerage commission and other costs of
transactions in odd lots are generally higher than the costs of
transactions of more than 100 shares of common stock.
Accordingly, a reverse stock split may not achieve the desired
results of increasing marketability and liquidity of our common
stock.

The effective increase in the authorized number of
shares of our common stock as a result of our proposed reverse
stock split could have anti-takeover implications.

In addition to our reverse stock split proposal, we are also
seeking at our 2017 Annual Meeting of Stockholders approval for a
reduction in the total number of authorized shares of our common
stock, but only if the reverse stock split proposal is approved
and a reverse stock split is implemented. If both stockholder
proposals are approved, the reduction in our authorized shares of
common stock will be 50% of the reduction in the issued and
outstanding shares immediately following the reverse stock split;
as a result, the combination of the reverse stock split and
reduction in our authorized shares would effectively increase our
authorized shares relative to our issued and outstanding shares.
This effective increase in the authorized number of shares of our
common stock could, under certain circumstances, have
anti-takeover implications. The additional shares of common stock
that would become available for issuance if these stockholder
proposals are approved and a reverse stock split is implemented
could be used by us to oppose a hostile takeover attempt or to
delay or prevent changes in control or our management. For
example, without further stockholder approval, our Board of
Directors could adopt a poison pill which would, under certain
circumstances related to an acquisition of our securities that is
not approved by our Board of Directors, give certain holders the
right to acquire additional shares of our common stock at a low
price. Our Board also could strategically sell shares of common
stock in a private transaction to purchasers who would oppose a
takeover or favor the current Board of Directors. Although these
stockholder proposals have been prompted by business and
financial considerations and not by the threat of any hostile
takeover attempt (nor is our Board of Directors currently aware
of any such attempts directed at us), stockholders should be
aware that approval of these proposals could facilitate future
efforts by us to deter or prevent changes in control, including
transactions in which our stockholders might otherwise receive a
premium for their shares over then current market prices.


About Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)

Arena Pharmaceuticals, Inc. is a biopharmaceutical company focused on discovering, developing and commercializing small molecule drugs that target G protein-coupled receptors (GPCRs). The Company’s drug, Lorcaserin, is approved for marketing in the United States and South Korea for the indication of weight management, and is being commercialized under the brand name, BELVIQ. The Company’s drug candidates in clinical development include APD334 for autoimmune diseases, ralinepag for vascular diseases and APD371 for pain. APD334 is an orally available modulator of the sphingosine 1-phosphate subtype 1 (S1P1) receptor intended for the treatment of multiple sclerosis, psoriasis, inflammatory bowel diseases and rheumatoid arthritis. The Company’s programs under collaboration include nelotanserin for dementia-associated psychosis, temanogrel for thrombotic diseases and an undisclosed orphan GPCR for central nervous system indication(s).

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) Recent Trading Information

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) closed its last trading session up +0.05 at 1.48 with 1,465,033 shares trading hands.

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