By Randall Osborne

West Coast Editor

To pursue ¿ by itself and with partners ¿ the work that earlier this year bagged the company an expansion of its deal with Taisho Pharmaceutical Ltd. focused on G protein-coupled receptors, Arena Pharmaceuticals Inc. priced its follow-on offering of 5 million shares at $27.50 per share.

The sale of 4 million shares by the San Diego-based firm raised $110 million, and the remainder was sold by stockholders.

Arena, with 160 employees, went public last July, raising $108 million by selling 6 million shares at $18 each. After the most recent offering, the company has 26.7 million shares outstanding. It registered for the follow-on earlier in June. (See BioWorld Today, July 31, 2000, and June 6, 2001.)

The firm has developed Constitutively Activated Receptor Technology (CART), which can identify drug leads when used with GPCRs or other receptors.

¿We do it on a receptor-by-receptor basis, and there are approximately 800 of them, so we still have an extremely large proportion available,¿ said Joseph Mooney, chief financial officer of Arena.

¿We¿re trying to go for 10 to 12 Arena drugs,¿ he added, telling BioWorld Today that the company aims to file an investigational new drug application with the FDA by the end of next year.

¿We¿re doing preclinical work on a couple of candidates,¿ he said, but declined to be more specific.

Broadening the agreement with Taisho let Arena license rights to GPCR 18F, which Arena had evaluated in animal studies, in return for an up-front payment and potential milestone payments, as well as full-time equivalent payments and royalties. That deal already had yielded a GPCR accepted by Taisho, triggering a milestone payment to Arena. (See BioWorld Today, Feb. 1, 2001.)

Another deal from which Arena has collected milestone payments is with Eli Lilly and Co., of Indianapolis. Lilly accepted CART-activated versions of three GPCRs from the endocrine, cardiovascular and central nervous system areas.

¿We received last year nine milestone payments for early applications [of the CART technology],¿ Mooney said. ¿These are not clinical milestones.¿

The most recently priced offering gives Arena, which Mooney said is ¿profitable with positive cash flow,¿ $225 million in cash.

¿It achieved our objectives of making sure our financial strength was matching the great strides we¿ve made in the laboratory and in CART work,¿ he said.

Managing underwriters in the most recently priced offering are Thomas Weisel Partners LLC, of San Francisco; Dain Rauscher Wessels, of San Francisco; ABN AMRO Rothschild LLC, of the Netherlands; and Lazard Freres & Co. LLC, of New York. Arena granted underwriters a 30-day overallotment option on up to 750,000 additional shares.

Arena¿s stock (NASDAQ:ARNA) closed Friday at $30.11, up $2.61.

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