One of San Diego's biggest biotech companies is being acquired by one of the world's biggest pharmaceutical companies.
Pfizer Inc (NYSE: PFE) has agreed to buy San Diego-based Arena Pharmaceuticals (Nasdaq: ARNA) in a $6.7 billion all-cash transaction, the companies announced on Monday. The blockbuster deal, which is subject to regulatory approvals and approval by Arena’s stockholders, is expected to significantly expand Pfizer's cancer and inflammatory disease drug pipeline.
Arena’s drug pipeline targets treatments in gastroenterology, dermatology and cardiology.
One of the company's most promising drug candidates -- etrasimod -- is currently in development for a range of immuno-inflammatory diseases in late-stage studies.
Under the terms of the agreement, Pfizer will buy all outstanding shares of Arena for $100 per share, representing a 100% premium to Arena's closing price on Friday.
The share price of ARNA surged as high as $94 in early Wall Street trading Monday morning.
“The proposed acquisition of Arena complements our capabilities and expertise in Inflammation and Immunology, a Pfizer innovation engine developing potential therapies for patients with debilitating immuno-inflammatory diseases with a need for more effective treatment options,” said Mike Gladstone, global president and general manager, Pfizer Inflammation and Immunology. “Utilizing Pfizer’s leading research and global development capabilities, we plan to accelerate the clinical development of etrasimod for patients with immuno-inflammatory diseases.”
“We’re delighted to announce Pfizer’s proposed acquisition of Arena, recognizing ... our contribution to addressing unmet needs in immune-mediated inflammatory diseases,” said Amit D. Munshi, president and CEO of Arena. “Pfizer’s capabilities will accelerate our mission to deliver our important medicines to patients. We believe this transaction represents the best next step for both patients and shareholders.”
Pfizer said it will finance the transaction with existing cash on hand.