Arena in 32M SwFr accord Siegfried

San Diego, USA-based Arena Pharmaceuticals has entered into a strategic cooperation with Swiss firm Siegfried. This primarily relates to the manufacturing of lorcaserin, Arena's Phase III drug candidate for the treatment of obesity, which is expected to be necessary for the US firm's planned New Drug Application submission to the Food and Drug Administration and for commercialization of lorcaserin after regulatory approval.

The purchase price of the acquired assets - which includes certain Siegfried finishing facilities and technology - is 32.0 million Swiss francs ($28.7 million) in cash and around 1.5 million shares of Arena common stock. The cash payable is 22.0 million francs at closing and 10.0 million francs in three equal installments in the third, fourth and fifth years after completion. The stock is subject to a lock-up agreement for a period of three years from closing. Arena estimates that substantially the entire purchase price paid to Siegfried will be recouped through reduced manufacturing related costs within one year post launch of lorcaserin.

The US firm believes that the deal has the potential to: reduce manufacturing-related risks to the lorcaserin NDA registration lots and submission of its planned filing; secure a long-term supply of active pharmaceutical ingredient; reduce the overall manufacturing costs for this agent and other Arena product candidates; and lead to significant future tax benefits, which may result from a favorable tax ruling Arena received from Switzerland.