Pfizer Agrees to Buy Arena Pharmaceuticals for $6.7B

Pharmaceutical giant Pfizer Inc. has agreed this week to acquire Arena Pharmaceuticals Inc. in a deal valued at roughly $6.7 billion.

The acquisition of San Diego-based Arena brings potential therapies to Pfizer that target immuno-inflammatory diseases.

Pfizer will pay $100 a share in an all-cash transaction for Arena and its assets in gastroenterology, dermatology and cardiology, according to a statement Monday. This price represents about double Arena’s Friday closing price.

Shares of Arena exploded as much as 88% on the news while Pfizer gained as much as 5.2%.

According to some analysts, the deal could face regulatory scrutiny.

The “newly muscular” Federal Trade Commission headed by Lina Khan may be an obstacle to the deal, according to Citi analyst Andrew Baum. The regulator may see overlap between estrasimod and some of Pfizer’s immunology portfolio, said Baum.

According to Bloomberg Intelligence analyst Sam Fazeli, “Etrasimod would help reassert the drugmaker’s footing in the oral space in inflammatory bowel disease, given Xeljanz’s U.S. label warnings and the overhang around JAK-class safety. Consensus calls for the S1P1 drug to have sales of $735 million in 2025, while it’s also being explored in other immuno-inflammatory conditions.”

Gladstone said Pfizer sees etrasimod as the “driver” of the deal, as it is an oral product that can be easily administered and may have best-in-class effectiveness.

Etrasimod is an investigational, once-daily, oral, selective S1P receptor modulator designed to partially and reversibly reduce lymphocyte levels at sites of inflammation, while maintaining components of immune function.

Louise Chen, an analyst for Cantor Fitzgerald, in a note to investors, “We think this deal makes strategic sense.”

Close FTC scrutiny means that reviews are taking longer than usual, said Aamir Malik, Pfizer’s Chief Business Innovation Officer. Malik said Pfizer will engage collaboratively with regulators and emphasize “the pro-competitive rationale” for the deal.

“None of the other programs in Arena’s pipeline are similar to any programs we have in Pfizer’s pipeline,” he added. “When you put all that together, we’re confident that the regulators will understand this.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.