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2021-12-14| M&A

Pfizer to Acquire Arena and its Immuno-Inflammatory Drug for $6.7 Billion

by Joy Lin
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Pfizer has agreed to acquire Arena Pharmaceuticals for $6.7 billion, in a deal centered around etrasimod, a treatment for inflammatory diseases of the digestive tract. 

Etrasimod, Arena’s lead candidate, is an oral selective sphingosine-1-phosphate (S1P) receptor modulator, a class of drugs that works by blocking immune cells from entering their sites of action, thus lowering inflammation. The S1P drug has shown promise in multiple trials in inflammatory bowel diseases. 

“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 Arena CEO Amit D. Munshi in a statement. 

“Utilizing Pfizer’s leading research and global development capabilities, we plan to accelerate the clinical development of etrasimod for patients with immuno-inflammatory diseases,” said Mike Gladstone, General Manager at Pfizer Inflammation and Immunology. 

The boards of both companies have unanimously agreed to the acquisition. Under the agreement, Pfizer will buy all of Arena’s common stock for $100 per share in cash. This represents a 100% premium on Arena’s last closing price of around $49.94 on Friday. 

Etrasimod and other Arena Assets

 

Ongoing clinical studies of etrasimod include two Phase 3 studies in ulcerative colitis (UC), a Phase 2/3 program in Crohn’s disease, and Phase 2 studies in eosinophilic esophagitis and alopecia areata. A Phase 3 trial in atopic dermatitis is also in the works. 

Previously, Arena announced positive results for etrasimod in the extended Phase 2 UC study called Oasis, where patients showed improvement in clinical response, remission or endoscopic improvements by week 12. The improvements were seen to last when the patients were followed up at 46 weeks. 

Besides etrasimod, Arena’s other candidates include temanogrel and APD418. Temanogrel is a selective 5-HT2A receptor inverse agonist currently undergoing a Phase 2 for microvascular obstruction (MVO) and Raynaud’s phenomenon secondary to systemic sclerosis (SSc-RP). APD418 is a β3-adrenergic receptor (AdrR) antagonist designed to help the heart contract; it is in Phase 2 for acute heart failure. 

Arena has an ongoing collaboration with Aristea Therapeutics over RIST4721, an oral CXCR2 antagonist slated for a Phase 2b for palmoplantar pustulosis. 

These assets will now expand Pfizer’s drug portfolio for immuno-inflammatory diseases, giving the drug giant some long-term securities for 2025 and beyond, a time when cash reserves from its Covid-19 vaccine Cominarty will most likely be exhausted. 

Pfizer already boasts a considerable pipeline of drugs in the category, including ritlecitinib, a late-stage JAK/TEC inhibitor for alopecia areata, UC, Crohn’s disease, and vitiligo, and PF-06480605, a TNFSF15 blocker for UC. 

However, the company had to trim several JAK-related assets including brepocitinib and PF-06826647 after the FDA issued class warnings for Xeljanz (tofacitinib), Pfizer’s approved treatment for several inflammatory disorders, over increased risk for cardiac toxicities. 

In Competition with BMS and Novartis 

 

By welcoming etrasimod into the fold, Pfizer has signalled its intent to go head to head with Zeposia (ozanimod), another S1P drug developed by Bristol-Myers Squibb. Zeposia was approved last year for UC, and had collected another indication for relapsing forms of multiple sclerosis. 

Other competitors for etrasimod are Novartis’ Gilenya (fingolimod) and Mayzent (siponimod). The two drugs also modulate S1P, and were both initially approved for multiple sclerosis. 

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