Arena Pharmaceuticals ($ARNA) announced amending its BELVIQ (lorcaserin HCl) marketing and supply agreement with Eisai ($ESALY). The markets responded well to the announcement and stock touched intra-day high of $1.51. It eventually closed at $1.51, up 2%. The stock further gained 7.33% in the after-hour trading.
Under the revised agreement, Eisai will have global commercialization rights including the territories retained by Arena (South Korea, Taiwan, Australia, Israel and New Zealand) under the companies' previous agreement in November, 2013.
Eisai will also own complete responsibility for all lorcaserin development expenses going forward while Arena will continue to receive royalties on BELVIQ net sales and will continue to manufacture product at its facility in Switzerland.
The financial terms of the agreement allows for $23 million in cash payments to Arena. It will also receive over $80M in potential cost relief on current lorcaserin development obligations. The company said that it is in better position to concentrate on its clinical-stage programs.
Arena stock lost 21% of its value in past one year. The company had recently reported its third quarter revenue at $19.2 million, while it spent $17.5 million on research and development expenses during the same time period. Its net loss for the quarter stood at $0.05 per share.