Arena Pharmaceuticals, Inc.
9th Annual Needham Healthcare Conference
June 10, 2010
Arena Pharmaceuticals, Inc. 2
Obesity May Wipe Out Benefit of Anti-Smoking Effort, Study Says
Nearly 10% of Health Spending Due to Obesity
Obesity and the EconomyFrom Crisis to Opportunity
Ex-military leaders: Young adults 'too fat to fight'
Nature and Nachos: How Fat Happens
Science explains the factors that make us vulnerable; nutritional labels
explain the rest
Arena Pharmaceuticals, Inc.
Today’s Agenda
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• 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.
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 disclaimany intent or obligation to update these forward-looking statements, other than as may be required under applicable law.
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Arena Pharmaceuticals, Inc.
Today’s Dissatisfied Weight Management Market
Arena Pharmaceuticals, Inc.
Primary Care Physicians Write Most Obesity Prescriptions
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Source: Decision Resources © 2007 Obesity: New Treatments and Reimbursement Issues, November 2007
Arena Pharmaceuticals, Inc.
PCPs Are Dissatisfied With Available Agents
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Source: Decision Resources © 2007 Obesity: New Treatments and Reimbursement Issues, November 2007 (70 PCPs surveyed)
Arena Pharmaceuticals, Inc.
Phentermine Is The Most Prescribed Obesity Drug
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Source: Wolters Kluwer HealthNote: “Others” primarily consist of amphetamines
Oral Anti–Obesity Drugs TRx Share for Qtr 2, 2008
(261,782)
(54,883) (101,188)
(1,654,282)
Total Rx’s 2,072,135
Arena Pharmaceuticals, Inc.
• 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
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Addressing the Needs of Physicians & Patients
Arena Pharmaceuticals, Inc.
Weight Loss Improves CV Risk Factors
1. R Wing et al. - Arch Intern Med. 1987;147:1749-17532. I Mertens, L Van Gaal - Obes Res 2000;8:270-2783. G Blackburn - Obes Res 1995;3 (Suppl 2):211S-216S Slide Source:www.obesityonline.org
4. H Ditschunheit et al. - Eur J Clin Nutr. 2002;56:264-2705. American Heart Association6. “Diabetes Prevention Program” - N Engl J Med. 2002;346:393-403
Risk of T2 Diabetes(6)
T2 Diabetes(5)
Triglycerides(4)
HDL Cholesterol(3)
Total Cholesterol(3)
Blood Pressure(2)
HbA1c(1)
5% - 10% Weight Loss
Arena Pharmaceuticals, Inc.
Clinical Overview of Lorcaserin
Arena Pharmaceuticals, Inc.
Lorcaserin for Weight Management
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• 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. 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
Status Complete Complete
Patients 3,182 4,008
Daily dosing vs. placebo
10 mg BID 10 mg QD & BID
Echo monitoring
Screening, 6, 12, 18, 24 months
Entry, 6, 12 months
Treatment duration
Two years One year
BLOSSOM BLOOM-DM
Fully enrolled
604
10 mg QD & BID
Entry, 6, 12 months
One year
Efficacy endpoints
Weight loss at 1 yrWt loss maintenance in yr 2 Weight loss at 1 yr Weight loss at 1 yr
Echo exclusions
FDA valvulopathy None None
Arena Pharmaceuticals, Inc.
BLOOM & BLOSSOM Baseline Demographics
Baseline Demographics
Age 44 years
Gender Men
Women16-22%78-84%
Weight 100 kg
BMI 36
EthnicityCaucasian
African AmericanHispanic/Latino
66-68%19-20%11-13%
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Arena Pharmaceuticals, Inc.
Categorical Weight Loss at Week 52 (MITT-LOCF)
Lorcaserin 10 mg BID
Placebo*p < 0.0001
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>5% Weight Loss >10% Weight Loss
0
10
20
30
40
50 *
*
% o
f P
atie
nts
47.5%
20.3%22.6%
7.7%
BLOOM
>5% Weight Loss >10% Weight Loss
*
*
47.2%
25.0% 22.6%
9.7%
BLOSSOM
Approvable Categorical Weight Loss (MITT)
Arena Pharmaceuticals, Inc.
Benefit of Long-Term Treatment (Per Protocol)
Categorical Weight Loss at Week 52 (Per Protocol)
Lorcaserin 10 mg BID
Placebo*p < 0.0001
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BLOOM66.4%
32.1%36.2%
13.6%
0
20
40
60
80
*
*
% o
f P
atie
nts
>5% Weight Loss >10% Weight Loss
BLOSSOM
*
*34.9%
63.2%
35.1%
16.1%
>5% Weight Loss >10% Weight Loss
Arena Pharmaceuticals, Inc.
Pivotal Program Efficacy Highlights: Lorcaserin Patients Completing 1 Year of Treatment
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35 lbs
17 lbs
8%
>5%
31%
Average weight loss for top quartile of BLOSSOM patients
Average patient weight loss
Weight loss achieved by over one-third of patients
Weight loss achieved by about two-thirds of patients
Average patient weight loss
Average excess body weight lost by BLOOM patients*
* Based on normal BMI of 25 kg/m2
>10%
Arena Pharmaceuticals, Inc.
Secondary Endpoints Improve: Combined Pivotal Trial Data
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YesTriglycerides
YesLDL cholesterol
YesTotal Cholesterol
YesHDL cholesterol
YesWaist Circumference
Yes BMI
Measurement Improved
YesQuality of Life
YesDiastolic BP
YesHbA1c
YesFasting glucose
YesSystolic BP
Measurement Improved
Heart Rate Yes
MITT-LOCF vs. placebo
Importantly, blood pressure and heart rate decreased
Arena Pharmaceuticals, Inc. 19
BLOOM Year OneLorcaserin 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 was Very Well Tolerated
12.6%14.6%12.7%Upper respiratory infection
BLOSSOM Lorcaserin 10 mg BID
Lorcaserin 10 mg QD Placebo
Headache 15.6% 15.6% 9.2%
Nasopharyngitis 12.5% 11.9% 12.0%
Nausea 9.1% 7.6% 5.3%
Dizziness 8.7% 6.2% 3.9%
Most Frequent Adverse Events in BLOOM and BLOSSOM
Headache was the only AE that exceeded placebo by >5%
Arena Pharmaceuticals, Inc.
Pivotal Program Safety And Tolerability
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2-year data supporting long-term safety profile
Low incidence of withdrawals due to AEs
Improved quality of life
Rates of depression, anxiety and suicidal ideation similar to placebo
Lorcaserin
No increased risk of cardiac valvulopathy
Very well tolerated
Patients started on full dose, without a titration period
Arena Pharmaceuticals, Inc. 21
Creating Value in 2010
Lorcaserin NDA accepted for filing
Upcoming Lorcaserin Milestones
Peer-reviewed publications
Assigned October 22, 2010, PDUFA date
Tentatively scheduled September 16, 2010, Advisory Committee meeting
Lorcaserin Advisory Committee meeting
BLOOM-DM Phase 3 results
FDA approval
Arena Pharmaceuticals, Inc.
Market Opportunity
Arena Pharmaceuticals, Inc.
Potential to Re-Energize Weight Management
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
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If approved, lorcaserin has the potential to serve as first-line therapy for the majority of overweight* and obese patients
* BMI ≥27 with at least one co-morbidity
Arena Pharmaceuticals, Inc.
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
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Arena Pharmaceuticals, Inc.
Global Patent Coverage
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Percent of Global Pharmaceutical Sales Covered by Lorcaserin Patents*
• Composition of matter patent issued in major jurisdictions, including US, Europe, Japan, Canada and China
• First expiration is 2023 in most jurisdictions - does not include any patent term extensions
* IMS Health, 2008 sales
Issued93.5%
Pending3.0%
Lorcaserin represents a significant global commercial opportunity
Arena Pharmaceuticals, Inc.
Pipeline & Financials
Arena Pharmaceuticals, Inc. 27
Pipeline: Sustaining Innovation
Program / Indication NDAPhase 2Phase 1Preclinical
LorcaserinWeight Management
Phase 3
Metabolic Diseases
Central Nervous System
Cardiovascular
Inflammatory Diseases Research Programs
APD916Narcolepsy and Cataplexy
APD597Type 2 Diabetes
Ortho-McNeil-Janssen
APD791*Arterial Thrombosis
APD811Pulmonary Arterial Hypertension
* Not currently in active development
Arena Pharmaceuticals, Inc.
APD916 for Narcolepsy & Cataplexy
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• 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.
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
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Arena Pharmaceuticals, Inc. 30
Total Revenues
Expenses:Cost of manufacturing servicesResearch and developmentGeneral and administrativeAmortization of acquired technology
Total operating expenses
Total interest and other expense, net
Net loss
$2.5
1.918.37.00.5
27.7
(6.1)
$(31.3)
Arena Finances
For the Quarter Ended March 31, 2010
(in millions)
Balance Sheet Data as of March 31, 2010:Cash, cash equivalents and short-term investmentsTotal assetsTotal stockholders’ equity
$107.6$227.3$68.7
Arena Pharmaceuticals, Inc. 31
Creating Value in 2010
Upcoming Milestones
BLOOM-DM Phase 3 results
Peer-reviewed publications
APD916 Phase 1 results
Collaboration updates
Lorcaserin Advisory Committee meeting
FDA approval of lorcaserin
Arena Pharmaceuticals, Inc.
9th Annual Needham Healthcare Conference
June 10, 2010