By Karen Pihl-Carey

Arena Pharmaceuticals Inc. intends to raise $100 million in an initial public offering (IPO) to finance its drug discovery work, which focuses on G protein-coupled receptors.

The company did not list the number of shares it plans to sell or at what price they will be sold in the SEC registration filing. It said net proceeds will go toward general corporate purposes, including working capital, research and development and clinical testing. The funding also may go toward the purchase of complementary businesses or technologies.

The prospectus lists as underwriters ING Barings LLC, Prudential Vector Healthcare and SG Cowen Securities Corp., all of New York

Arena, founded in April 1997 and based in San Diego, has developed a screening technology, called constituitively activated receptor technology (CART), that allows the company to rapidly identify drug candidates. The CART technology is designed to discover chemical compounds that target G protein-coupled receptors (GPCRs). Traditional drug discovery techniques require the identification and characterization of a receptor's native ligand, a process that limits the rate at which drugs are discovered at receptor targets, the company said. The CART technology allows drug discovery without the need to identify a receptor's native ligand. Instead, it genetically alters receptors to mimic or enhance the biological response that occurs when the native ligand binds to a receptor.

Arena has identified drug candidates that inhibit or activate a number of orphan and known GPCR targets. In the past three years, the company has obtained full-length genetic sequences of 235 GPCRs, 120 of which are human orphan GPCRs and 110 of which are human known GPCRs. The remaining five are non-human receptors. The company focuses on small-molecule chemical compounds because they can be taken orally and are easy to manufacture.

Arena has applied CART to 15 orphan GPCRs identified as possible drug targets for obesity, cancer, cardiovascular disease, diabetes, inflammation and Alzheimer's disease. Arena also has discovered drug candidates that may be useful in treating psychiatric disorders such as schizophrenia, which result from the overactivity of known GPCRs.

The company has collaborative agreements with several pharmaceutical and biotechnology companies, including Eli Lilly & Co., of Indianapolis, and Fujisawa Pharmaceutical Co. Ltd., of Osaka, Japan.

The Lilly collaboration was launched in April to focus on diseases of the central nervous system and endocrine system, as well as cardiovascular diseases. Arena will CART-activate mutually selected GPCRs and will provide Lilly with high-throughput assays. Under terms of the agreement, Arena receives a technology access fee and development and milestone payments, as well as royalties.

In January, Arena entered the collaboration with Fujisawa. That partnership involves the validation of up to 13 orphan GPCRs as drug screening targets. Arena also has collaborations with Lexicon Genetics Inc., of The Woodlands, Texas, and Neurocrine Biosciences Inc., of San Diego.

Aside from its CART technology, Arena is developing T-82, an acetylcholine enhancer, as a potential treatment for Alzheimer's disease. The company has completed three Phase I trials and plans to begin Phase II testing this year.

Arena posted a net loss of $4.3 million and a pro forma net loss per share of 43 cents for the first quarter. As of March 31, the company had cash and cash equivalents of $27.5 million.

Arena intends to list its shares on the Nasdaq National Market under the symbol ARNA.