Arena Pharmaceuticals, Inc.




9th Annual Needham Healthcare Conference
                                   June 10, 2010
Obesity May Wipe Out Benefit of
Anti-Smoking Effort, Study Says                           Obesity and the Economy
        ...
Today’s Agenda

• Today’s dissatisfied weight management market
   – Addressing the needs of patients and physicians

• Cl...
Forward-Looking Statements

 This presentation includes forward-looking statements that involve a number of risks and
 unc...
Arena Pharmaceuticals, Inc.




Today’s Dissatisfied Weight Management Market
Primary Care Physicians Write Most Obesity Prescriptions




Source: Decision Resources © 2007 Obesity: New Treatments and...
PCPs Are Dissatisfied With Available Agents




Source: Decision Resources © 2007 Obesity: New Treatments and Reimbursemen...
Phentermine Is The Most Prescribed Obesity Drug

                            Oral Anti–Obesity Drugs TRx Share for Qtr 2, ...
Addressing the Needs of Physicians & Patients

•   Physicians want new treatments with new mechanistic approaches
    – Im...
Weight Loss Improves CV Risk Factors

                                                                                    ...
Arena Pharmaceuticals, Inc.




Clinical Overview of Lorcaserin
Lorcaserin for Weight Management


• Novel single agent discovered and developed internally
• Selective drug candidate wit...
Completed Pivotal Program: BLOOM & BLOSSOM trials
Lorcaserin: Robust Phase 3 Program

                Primary endpoint for...
BLOOM & BLOSSOM Baseline Demographics


                      Baseline Demographics
          Age                         ...
Approvable Categorical Weight Loss (MITT)
                 Lorcaserin 10 mg BID
                 Placebo
                 ...
Benefit of Long-Term Treatment (Per Protocol)
          Lorcaserin 10 mg BID
            Placebo
                         ...
Pivotal Program Efficacy Highlights:
   Lorcaserin Patients Completing 1 Year of Treatment




       35 lbs            Av...
Secondary Endpoints Improve:
Combined Pivotal Trial Data



   Measurement             Improved                   Measurem...
Lorcaserin was Very Well Tolerated

   Most Frequent Adverse Events in BLOOM and BLOSSOM
                                 ...
Pivotal Program Safety And Tolerability


                                                                      Lorcaserin...
Creating Value in 2010

    Lorcaserin NDA accepted for filing

    Tentatively scheduled September 16, 2010, Advisory Com...
Arena Pharmaceuticals, Inc.




Market Opportunity
Potential to Re-Energize Weight Management


         If approved, lorcaserin has the potential to serve as
 first-line th...
Building a Foundation for Launch


     Goal: Establish an agreement with a pharmaceutical
              company to commer...
Global Patent Coverage


    Percent of Global Pharmaceutical
  Sales Covered by Lorcaserin Patents*
                     ...
Arena Pharmaceuticals, Inc.




Pipeline & Financials
Pipeline: Sustaining Innovation


      Program / Indication              Preclinical       Phase 1                       ...
APD916 for Narcolepsy & Cataplexy

    • Market
             – Narcolepsy is not rare, but is underrecognized and underdia...
Ortho-McNeil-Janssen Collaboration


• Developing orally-active compounds for type 2 diabetes by
  targeting GPR119
• Lead...
Arena Finances
For the Quarter Ended March 31, 2010
                                                                  (in ...
Creating Value in 2010


              Upcoming Milestones

            Peer-reviewed publications

            APD916 Pha...
Arena Pharmaceuticals, Inc.




9th Annual Needham Healthcare Conference
                                   June 10, 2010
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Arna Needham2010

  1. 1. Arena Pharmaceuticals, Inc. 9th Annual Needham Healthcare Conference June 10, 2010
  2. 2. Obesity May Wipe Out Benefit of Anti-Smoking Effort, Study Says Obesity and the Economy From Crisis to Opportunity Nature and Nachos: How Fat Happens Science explains the factors that make us vulnerable; nutritional labels Nearly 10% of Health explain the rest Spending Due to Obesity Ex-military leaders: Young adults 'too fat to fight' Arena Pharmaceuticals, Inc. 2
  3. 3. Today’s Agenda • Today’s dissatisfied weight management market – Addressing the needs of patients and physicians • Clinical overview of lorcaserin – Phase 3 program and results – October 22, 2010, PDUFA date • Lorcaserin’s market opportunity – Market research – Building a foundation for launch – Global patent coverage • Corporate snapshot – Pipeline: opportunities beyond lorcaserin – Financials as of March 31, 2010 – Upcoming milestones Arena Pharmaceuticals, Inc. 3
  4. 4. Forward-Looking Statements This presentation includes forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements include statements about the potential of lorcaserin and other compounds and programs, including about lorcaserin’s approvability, regulatory guidance, commercialization opportunities, financing, whether, when and how we and our collaborators continue to develop compounds, patents, upcoming milestones and news, our strategy, technologies, future opportunities, potential achievements, goals and expectations, and other statements that are not historical facts, including statements which may be preceded by the words “potential,” “believe,” “expect,” “predict,” “continue,” “likely,” “unlikely,” “anticipate,” “estimate,” “optimistic,” “intend,” “plan,” “project,” “target,” “aim,” “will,” “may” and similar words. For such statements, we claim the protection of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the time they were made. Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, our ability to obtain adequate funds; regulatory authorities may not find our clinical or other data sufficient and may not approve lorcaserin or any of our other drug candidates to be marketed in the United States or elsewhere; our ability to enter into agreements with pharmaceutical companies to commercialize lorcaserin or partner other of our compounds or programs; the timing, success and cost of our clinical, research and development programs; results of clinical trials and other studies are subject to different interpretations and may not be predictive of future results; our ability to obtain and defend our patents; and the timing and receipt of payments and fees, if any, from our collaborators. Additional factors that could cause actual results to differ materially from those stated or implied by our forward-looking statements are disclosed in our SEC filings. We disclaim any intent or obligation to update these forward-looking statements, other than as may be required under applicable law. Arena Pharmaceuticals, Inc. 4
  5. 5. Arena Pharmaceuticals, Inc. Today’s Dissatisfied Weight Management Market
  6. 6. Primary Care Physicians Write Most Obesity Prescriptions Source: Decision Resources © 2007 Obesity: New Treatments and Reimbursement Issues, November 2007 Arena Pharmaceuticals, Inc. 6
  7. 7. PCPs Are Dissatisfied With Available Agents Source: Decision Resources © 2007 Obesity: New Treatments and Reimbursement Issues, November 2007 (70 PCPs surveyed) Arena Pharmaceuticals, Inc. 7
  8. 8. Phentermine Is The Most Prescribed Obesity Drug Oral Anti–Obesity Drugs TRx Share for Qtr 2, 2008 (54,883) (101,188) (261,782) (1,654,282) Total Rx’s 2,072,135 Note: “Others” primarily consist of amphetamines Source: Wolters Kluwer Health Arena Pharmaceuticals, Inc. 8
  9. 9. Addressing the Needs of Physicians & Patients • Physicians want new treatments with new mechanistic approaches – Improved risk/benefit profiles – Better, longer-term treatment • Physicians want safe and effective drugs their patients can tolerate – Safety is of paramount importance – Treatment duration that enables patients to reduce weight and sustain loss • Physicians want weight loss to translate into improved health – Improve quality of life – Avoid increased risk of depression or anxiety – Parameters such as blood pressure, cholesterol, triglycerides and heart rate should move in the right direction Arena Pharmaceuticals, Inc. 9
  10. 10. Weight Loss Improves CV Risk Factors 5% - 10% Weight Loss HbA1c (1) Blood Pressure (2) Total Cholesterol (3) HDL Cholesterol (3) Triglycerides (4) T2 Diabetes (5) Risk of T2 Diabetes (6) 1. R Wing et al. - Arch Intern Med. 1987;147:1749-1753 4. H Ditschunheit et al. - Eur J Clin Nutr. 2002;56:264-270 2. I Mertens, L Van Gaal - Obes Res 2000;8:270-278 5. American Heart Association Slide Source:www.obesityonline.org 3. G Blackburn - Obes Res 1995;3 (Suppl 2):211S-216S 6. “Diabetes Prevention Program” - N Engl J Med. 2002;346:393-403 Arena Pharmaceuticals, Inc.
  11. 11. Arena Pharmaceuticals, Inc. Clinical Overview of Lorcaserin
  12. 12. Lorcaserin for Weight Management • Novel single agent discovered and developed internally • Selective drug candidate with the right combination of Phase 3 efficacy, safety and tolerability to be potential first-line therapy • First in a new class of serotonin 2C receptor agonists – Stimulation of 2C receptor strongly associated with feeding behavior and satiety • Global composition of matter patent coverage of NCE Arena Pharmaceuticals, Inc. 12
  13. 13. Completed Pivotal Program: BLOOM & BLOSSOM trials Lorcaserin: Robust Phase 3 Program Primary endpoint for all trials: % of patients ≥ 5% weight loss at 52 weeks Trial BLOOM BLOSSOM BLOOM-DM Status Complete Complete Fully enrolled Patients 3,182 4,008 604 Treatment Two years One year One year duration Daily dosing 10 mg BID 10 mg QD & BID 10 mg QD & BID vs. placebo Echo Screening, 6, 12, 18, Entry, 6, 12 months Entry, 6, 12 months monitoring 24 months Echo FDA valvulopathy None None exclusions Efficacy Weight loss at 1 yr Weight loss at 1 yr Weight loss at 1 yr endpoints Wt loss maintenance in yr 2 Arena Pharmaceuticals, Inc. 13
  14. 14. BLOOM & BLOSSOM Baseline Demographics Baseline Demographics Age 44 years Gender Men 16-22% Women 78-84% Weight 100 kg BMI 36 Ethnicity Caucasian 66-68% African American 19-20% Hispanic/Latino 11-13% Arena Pharmaceuticals, Inc. 14
  15. 15. Approvable Categorical Weight Loss (MITT) Lorcaserin 10 mg BID Placebo Categorical Weight Loss at Week 52 (MITT-LOCF) *p < 0.0001 BLOOM BLOSSOM 47.5% 47.2% 50 * * 40 % of Patients 30 22.6% 25.0% 22.6% 20.3% * * 20 7.7% 9.7% 10 0 >5% Weight Loss >10% Weight Loss >5% Weight Loss >10% Weight Loss Arena Pharmaceuticals, Inc. 15
  16. 16. Benefit of Long-Term Treatment (Per Protocol) Lorcaserin 10 mg BID Placebo Categorical Weight Loss at Week 52 (Per Protocol) *p < 0.0001 80 BLOOM BLOSSOM 66.4% * 63.2% 60 * % of Patients 36.2% 40 35.1% 32.1% * 34.9% * 20 13.6% 16.1% 0 >5% Weight Loss >10% Weight Loss >5% Weight Loss >10% Weight Loss Arena Pharmaceuticals, Inc. 16
  17. 17. Pivotal Program Efficacy Highlights: Lorcaserin Patients Completing 1 Year of Treatment 35 lbs Average weight loss for top quartile of BLOSSOM patients 31% Average excess body weight lost by BLOOM patients* 17 lbs Average patient weight loss >10% Weight loss achieved by over one-third of patients 8% Average patient weight loss >5% Weight loss achieved by about two-thirds of patients * Based on normal BMI of 25 kg/m2 Arena Pharmaceuticals, Inc. 17
  18. 18. Secondary Endpoints Improve: Combined Pivotal Trial Data Measurement Improved Measurement Improved BMI Yes Fasting glucose Yes Waist Circumference Yes HbA1c Yes Total Cholesterol Yes Systolic BP Yes HDL cholesterol Yes Diastolic BP Yes LDL cholesterol Yes Heart Rate Yes Triglycerides Yes Quality of Life Yes MITT-LOCF vs. placebo Importantly, blood pressure and heart rate decreased Arena Pharmaceuticals, Inc. 18
  19. 19. Lorcaserin was Very Well Tolerated Most Frequent Adverse Events in BLOOM and BLOSSOM Year One BLOOM Lorcaserin Placebo Headache 18.0% 11.0% Upper respiratory infection 14.8% 11.9% Nasopharyngitis 13.4% 12.0% Dizziness 8.2% 3.8% Nausea 7.5% 5.4% Lorcaserin Lorcaserin BLOSSOM 10 mg BID 10 mg QD Placebo Headache 15.6% 15.6% 9.2% Upper respiratory infection 12.7% 14.6% 12.6% Nasopharyngitis 12.5% 11.9% 12.0% Nausea 9.1% 7.6% 5.3% Dizziness 8.7% 6.2% 3.9% Headache was the only AE that exceeded placebo by >5% Arena Pharmaceuticals, Inc. 19
  20. 20. Pivotal Program Safety And Tolerability Lorcaserin Patients started on full dose, without a titration period 2-year data supporting long-term safety profile Very well tolerated Low incidence of withdrawals due to AEs No increased risk of cardiac valvulopathy Improved quality of life Rates of depression, anxiety and suicidal ideation similar to placebo Arena Pharmaceuticals, Inc. 20
  21. 21. Creating Value in 2010 Lorcaserin NDA accepted for filing Tentatively scheduled September 16, 2010, Advisory Committee meeting Assigned October 22, 2010, PDUFA date Upcoming Lorcaserin Milestones Peer-reviewed publications Lorcaserin Advisory Committee meeting BLOOM-DM Phase 3 results FDA approval Arena Pharmaceuticals, Inc. 21
  22. 22. Arena Pharmaceuticals, Inc. Market Opportunity
  23. 23. Potential to Re-Energize Weight Management If approved, lorcaserin has the potential to serve as first-line therapy for the majority of overweight* and obese patients Market research indicates that surveyed physicians expect to: • Replace currently available agents with lorcaserin as first-line therapy • Expand the weight management category to patients not currently receiving pharmacotherapy * BMI ≥27 with at least one co-morbidity Arena Pharmaceuticals, Inc. 23
  24. 24. Building a Foundation for Launch Goal: Establish an agreement with a pharmaceutical company to commercialize lorcaserin Building a foundation for the anticipated launch: • Swiss manufacturing facility • Weight management market research • Commercial readiness Arena Pharmaceuticals, Inc. 24
  25. 25. Global Patent Coverage Percent of Global Pharmaceutical Sales Covered by Lorcaserin Patents* • Composition of matter patent Pending issued in major jurisdictions, 3.0% including US, Europe, Japan, Canada and China • First expiration is 2023 in most jurisdictions - does not include any patent term extensions Lorcaserin represents a significant Issued 93.5% global commercial opportunity * IMS Health, 2008 sales Arena Pharmaceuticals, Inc. 25
  26. 26. Arena Pharmaceuticals, Inc. Pipeline & Financials
  27. 27. Pipeline: Sustaining Innovation Program / Indication Preclinical Phase 1 Phase 2 Phase 3 NDA Lorcaserin Weight Management APD916 Narcolepsy and Cataplexy APD791* Arterial Thrombosis APD811 Pulmonary Arterial Hypertension APD597 Ortho-McNeil-Janssen Type 2 Diabetes Cardiovascular Central Nervous System Inflammatory Diseases Research Programs Metabolic Diseases * Not currently in active development Arena Pharmaceuticals, Inc. 27
  28. 28. APD916 for Narcolepsy & Cataplexy • Market – Narcolepsy is not rare, but is underrecognized and underdiagnosed(1) – Narcolepsy affects about one in every 2,000 Americans(1) • Current treatment – Treatments are limited and consist of: − Stimulant drugs to suppress daytime sleepiness − Antidepressants for cataplexy • APD916 – Potent and selective inverse agonist of histamine H3 receptor – Potential to treat narcolepsy and cataplexy by increasing central histamine activity • Status – Entered Phase 1 March 2010 1. National Institutes of Health Arena Pharmaceuticals, Inc. 28
  29. 29. Ortho-McNeil-Janssen Collaboration • Developing orally-active compounds for type 2 diabetes by targeting GPR119 • Lead compound APD597 in Phase 1 • GPR119 agonists are first-in-class therapeutics targeting a novel pancreatic beta cell receptor • Eligible to receive $295M per compound + double-digit royalties • As of 3/31/10, we have received total payments of $52.5M Arena Pharmaceuticals, Inc. 29
  30. 30. Arena Finances For the Quarter Ended March 31, 2010 (in millions) Total Revenues $2.5 Expenses: Cost of manufacturing services 1.9 Research and development 18.3 General and administrative 7.0 Amortization of acquired technology 0.5 Total operating expenses 27.7 Total interest and other expense, net (6.1) Net loss $(31.3) Balance Sheet Data as of March 31, 2010: Cash, cash equivalents and short-term investments $107.6 Total assets $227.3 Total stockholders’ equity $68.7 Arena Pharmaceuticals, Inc. 30
  31. 31. Creating Value in 2010 Upcoming Milestones Peer-reviewed publications APD916 Phase 1 results Collaboration updates Lorcaserin Advisory Committee meeting BLOOM-DM Phase 3 results FDA approval of lorcaserin Arena Pharmaceuticals, Inc. 31
  32. 32. Arena Pharmaceuticals, Inc. 9th Annual Needham Healthcare Conference June 10, 2010
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