Arena Pharma (ARNA) to Refocus on Clinical Stage Pipeline; Announces Workforce Reduction

Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) announced a strategic shifting of priorities to emphasize its proprietary clinical stage pipeline. The Company also announced the implementation of additional cost reductions to streamline the organization to support its development programs.

"We believe our clinical-stage pipeline has the potential to deliver first or best-in-class compounds for a broad range of indications. Building a streamlined and highly-focused organization supports our primary objective – developing our pipeline in a timely and efficient manner," said Amit Munshi, Arena's President and Chief Executive Officer.

Arena will reduce its US workforce by approximately 100 employees, or 73%, primarily in areas of research, manufacturing and G&A, which Arena estimates will reduce annualized cash expenditures for (i) personnel by approximately $17 million and (ii) related other operating expenses of between $6-8 million. Arena plans to implement additional cost control measures to further reduce its expenditures, including reductions at its Swiss manufacturing facility.

As a result of the US workforce reduction, which is planned to be completed by August 31, 2016, Arena estimates it will incur restructuring charges, primarily in the second quarter of 2016, of approximately $6.1 million (a majority of which are cash expenditures) in connection with one-time employee termination costs, including severance and other benefits.

Arena expects to discuss its strategic focus and organizational streamlining during its upcoming second quarter conference call.

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