ARNA stock rose more than 83% after Pfizer announced that it was acquiring Arena Pharmaceuticals at a price of $100 per share.
Pfizer to Acquire Arena Pharmaceuticals
Proposed acquisition offers potentially new, differentiated best-in-class approach to address unmet need for a broader number of patients with immuno-inflammatory diseases
Expands innovative pipeline potentially enhancing growth through 2025 and beyond
Transaction valued at $100 per Arena share in cash, for a total equity value of approximately $6.7 billion
Pfizer to host analyst and investor call at 10am EST today with Pfizer I&I executives
On December 13, 2021, Pfizer Inc. (NYSE: PFE) and Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) today announced that the companies have entered into a definitive agreement under which Pfizer will acquire Arena, a clinical stage company developing innovative potential therapies for the treatment of several immuno-inflammatory diseases. Under the terms of the agreement, Pfizer will acquire all the outstanding shares of Arena for $100 per share in an all-cash transaction for a total equity value of approximately $6.7 billion. The boards of directors of both companies have unanimously approved the transaction.
Arena’s portfolio includes diverse and promising development-stage therapeutic candidates in gastroenterology, dermatology, and cardiology, including etrasimod, an oral, selective sphingosine 1-phosphate (S1P) receptor modulator currently in development for a range of immuno-inflammatory diseases including gastrointestinal and dermatological diseases.
“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 & 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.”
Arena has built a robust development program for etrasimod, including two Phase 3 studies in ulcerative colitis (UC), a Phase 2/3 program in Crohn’s Disease, a planned Phase 3 program in atopic dermatitis, and ongoing Phase 2 studies in eosinophilic esophagitis and alopecia areata.
In UC, the randomized, placebo-controlled, dose-ranging, Phase 2 study (OASIS) evaluated the efficacy and safety of etrasimod in moderate to severe UC patients over 12 weeks versus placebo. In the study, most patients who achieved clinical response, clinical remission, or endoscopic improvement at week 12 experienced sustained or improved effects up to week 46 with etrasimod 2 mg in the open-label extension. Etrasimod also demonstrated a favorable benefit/risk profile, consistent with safety findings reported in the double-blind portion of OASIS. The findings are encouraging as there remains significant unmet need for safe and effective oral therapies in UC for patients with inadequate response, loss of response, or intolerance to conventional or advanced therapies. The OASIS trial supported the advancement of the ELEVATE UC 52 and UC 12 trials, which are currently fully enrolled, and for which data are expected in 2022.
In addition, Arena’s pipeline includes two development-stage cardiovascular assets, temanogrel and APD418. Temanogrel is currently in Phase 2 for the treatment of microvascular obstruction and Raynaud’s phenomenon secondary to systemic sclerosis. APD418 is currently in Phase 2 for acute heart failure.
“We’re delighted to announce Pfizer’s proposed acquisition of Arena, recognizing Arena’s potentially best in class S1P molecule and our contribution to addressing unmet needs in immune-mediated inflammatory diseases,” said Amit D. Munshi, President and Chief Executive Officer 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 expects to finance the transaction with existing cash on hand.
Under the terms of the merger agreement, Pfizer will acquire all of the outstanding shares of Arena common stock for $100 per share in cash. The proposed transaction is subject to customary closing conditions, including receipt of regulatory approvals and approval by Arena’s stockholders.
Pfizer’s financial advisors for the transaction are BofA Securities and Centerview Partners LLC, with Ropes & Gray and Arnold & Porter Kaye Scholer LLP acting as its legal advisors. Guggenheim Securities, LLC and Evercore Group LLC served as Arena’s financial advisors, while Cooley LLP served as its legal advisor.
Pfizer keeps $50 target on Ventyx after Pfizer buys Arena
Piper Sandler analyst Yasmeen Rahimi keeps an Overweight rating on Ventyx Biosciences (VTYX) with a $50 price target after Pfizer (PFE) announced the acquisition of Arena Pharmaceuticals (ARNA). This is the second big pharma acquisition mainly related to S1P modulators in inflammatory bowel disease and given the “large unmet need with a huge addressable population” in these indications, there could be more deals in the future for similar mechanism of action drugs with differentiated safety/efficacy profiles, such as Ventyx’s VTX002, Rahimi tells investors in a research note. The analyst adds that Ventyx “is not a one trick poney and is marching ahead with VTX958 to treat psoriasis.”
ARNA stock is ‘highly attractive’ for Pfizer, but FTC a concern, says Citi
Citi analyst Andrew Baum says Arena Pharmaceuticals ARNA stock is “highly attractive” for Pfizer (PFE) despite the 100% acquisition premium. The key issue is whether the “newly muscular” Federal Trade Commission, headed by Lina Khan, will allow the deal to proceed given the significant overlap between Pfizer’s JAK portfolio and Arena’s etrasimod, Baum tells investors in a research note. The analyst says etrasimod’s late stage development program across multiple indications “materially broadens” Pfizer’s current JAK centric small molecule offerings. However, the FTC is his concern given the “material and multiple overlap” of the portfolios. NOTE: Premium members know who Lina Khan REALLY is and who she used to work for.
ARNA Stock Technical Analysis
ARNA is an average performer in the Biotechnology industry, it outperforms 65% of 624 stocks in the same industry. Both the long and short term trends are negative before the Pfizer acquisition. The technical rating of ARNA is bad and it also does not present a quality setup at the moment. Prices have been extended to the upside lately. For a nice entry it is better to wait for a consolidation unless you wanted to go for the 10% premium below $100 in the stock on the fake FTC hype. Look folks, Pfizer has major influence over all government agencies, especially the FTC. I don’t see the FTC having a problem with this acquisition by Pfizer.