Arena cuts 80 employees
Arena Pharmaceuticals, based in San Diego, has announced plans to improve efficiencies and reduce costs as it focuses on the advancement of its R&D priorities. As part of the initiative, Arena will reduce its U.S. workforce by about 80 employees or 35%, which Arena estimates will reduce annualized cash expenditures for personnel by about $11.0 million. Arena plans to implement additional cost control measures to further reduce its expenditures, including reductions at its Swiss manufacturing facility.
“This initiative supports our strong desire to create a more streamlined and efficient organization focused on key priorities designed to add both near- and long-term value to the organization," said Harry Hixson Jr., Arena’s interim chief executive officer. “We believe our clinical-stage pipeline, including the MACE plus portion of the CAMELLIA study, offer tremendous promise, and we are committed to generating clinical data supporting meaningful differentiation of our compounds from currently available therapies.”
As a result of the U.S. workforce reduction, which is planned to be completed by Dec. 31, Arena estimates it will incur restructuring charges, primarily in the fourth quarter of 2015, of about $3.3 million in connection with one-time employee termination costs, including severance and other benefits.
As part of the initiative, Arena does not intend to currently advance certain lifecycle management programs for lorcaserin, including evaluating lorcaserin in combination with phentermine and for smoking cessation. Feedback from the FDA regarding a lorcaserin and phentermine combination for weight management indicated that a full development program would be required, including a factorial design phase II study and two, one-year phase III studies. In addition, with respect to lorcaserin’s potential for smoking cessation, there are market-specific challenges that might limit the potential return on the investment required to advance a development program for the indication.