October 28, 2015
By Mark Terry, BioSpace.com Breaking News Staff
In an effort to cut costs and advance several programs into clinical trials, San Diego-based Arena Pharmaceuticals announced today that it will lay off about 80 people, or 35 percent of its workforce.
The job cuts are expected to slash cash expenditures by about $11 million annually. They will be completed by the end of the year. As part of one-time termination costs, including severance and other benefits, the company expects restructuring charges in the fourth quarter of about $3.3 million.
In terms of its clinical activities, Arena plans to advance APD334, including an ongoing Phase II clinical trial for ulcerative colitis, as well as small pilot studies for other indications. It also has a program for ranlinepag, formerly APD811, which currently is in Phase II for pulmonary arterial hypertension (PAH).
Arena plans to advance its APD371 program through a Phase I multiple-ascending dose clinical trial, and to work with Eisai to advance the MACE, diabetes conversion, MACE plus and other aspects of an ongoing BELVIQ (lorcaserin HCL) cardiovascular outcomes trial, the CAMELLIA study, and apply for regulatory approval for BELVIQ XR.
Belviq is marketed by Japanese company Eisai Co Ltd. in countries where it has been approved to help quit smoking.
“This initiative supports our strong desire to create a more streamlined and efficient organization focused on key priorities designed to add both near- and long-term value to the organization,” said Harry Hixson, Jr., Arena’s interim chief executive officer in a statement. “We believe our clinical-stage pipeline, including the MACE plus portion of the CAMELLIA study, offer tremendous promise, and we are committed to generating clinical data supporting meaningful differentiation to our compounds from currently available therapies.”
In addition, Arena indicates it is halting its lifecycle management programs for lorcaserin, including its study of the drug in combination with phentermine and for smoking cessation. Consultation with the U.S. Food and Drug Administration (FDA) for lorcaserin and phentermine for weight management has indicated a full program of development would be necessary.
On Oct. 5, the company’s president and chief executive officer, Jack Lief, retired at the request of the board of directors. Hixson was the chairman of the board of Sequenom Inc. , from 2003 to March 2015, and as its chief executive officer from September 2009 to June 2014. Hixson was on Arena’s board since 2004. In addition to interim chief executive officer, he will also act as interim principal financial officer.
At the company’s second quarter financial statement release on Aug. 5, Arena reported quarterly revenues of $9.2 million, and six-month revenues of $21.4 million, down from 2014 levels in the same periods of $12.8 million and $19.6 million, respectively.
Arena was relatively stable until about mid-July, when it started on a downward trend. Shares traded on Jan. 13, 2015 for $6.05, dropped slightly to $5.01 on Mar. 19, and to $4.76 on July 15. Share prices then plunged to $1.81 on Oct. 1. Shares are currently trading for $2.03.
