Arena Pharmaceuticals, Inc. Under Investor Investigation Over Possible Securities Laws Violations

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Company Name(s): 
Arena Pharmaceuticals
Affected Securities: 

An investigation on behalf of investors in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) stock over possible violations of Federal Securities Laws by Arena Pharmaceuticals and others in connection with the rejection of the lorcaserin New Drug Application by the US Food and Drug Administration.

Arena Pharmaceuticals, Inc., located in San Diego, California, is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing oral drugs that target G protein-coupled receptors, in four major therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases. Arena Pharmaceuticals revenue decreased from $30.57million in 2006 to $10.39million in 2009. Its Net Income went over the same time period from a Net Loss of $86.25million to a Net Loss of $153.20million. The investigation by a law firm concerns whether Arena Pharmaceuticals, Inc. (Public, NASDAQ:ARNA) and other violated Federal securities laws by issuing statements that might have been false and misleading regarding its business and financial results.

Arena Pharmaceuticals, Inc. shares (ARNA) traded in June 2010 at roughly $3 per share before increasing to $7.95 per share in July. ARNA shares traded in August above $7, before getting into a free fall in the midst of September. On August 06, Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) and Eisai Inc. announced that the US Food and Drug Administration (FDA) has notified the company of the confirmed scheduling of an Endocrinologic and Metabolic Drugs Advisory Committee meeting on September 16, 2010, for the review of the lorcaserin New Drug Application (NDA). Arena Pharmaceuticals, Inc said that Lorcaserin, which Arena discovered and has developed for weight management, is intended for obese patients as well as overweight patients who have at least one weight-related co-morbid condition. Then on September 16, 2010, Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) and Eisai Inc. announced that the FDA Endocrinologic and Metabolic Drugs Advisory Committee voted 9 to 5 that the available data do not adequately demonstrate that the potential benefits of lorcaserin outweigh the potential risks, when used long-term in a population of overweight and obese individuals to allow marketing approval. After the announcement shares of Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) decreased from $7.51 per share on September 08 to recently $1.92 per share, or a decrease by almost 75%.