Arena Pharmaceuticals to lay off 35 percent of U.S. workers

(Reuters) - Arena Pharmaceuticals Inc will shelve some trials related to its weight-loss drug and lay off about 80 employees, or 35 percent of its U.S. workforce, to cut costs and focus on other drugs under development.

Shares of the company rose about 2 percent after the bell.

San Diego-based Arena said it would incur restructuring charges of about $3.3 million related to the U.S. layoffs, mostly in the fourth quarter. The layoffs would save the company about $11 million a year, it said on Tuesday.

Further cost reductions are likely to follow at the company's manufacturing plant in Switzerland.

Arena will not proceed at present with "certain lifecycle management programs" for its main drug, the anti-obesity treatment Belviq, sales of which have been underwhelming since its approval in 2012 by the U.S. Food and Drug Administration.

These include trials of Belviq in combination with phentermine, a generic diet drug, a process that the FDA said would have required a full development program.

Arena also decided against advancing a program to test Belviq as a treatment for helping smokers to quit, saying that "market-specific challenges might limit the potential return on the investment required to advance a development program."

Belviq is sold by Japan's Eisai Co Ltd in most of the countries where it has been approved.

Instead, Arena said it would now focus, among other things, on advancing experimental drugs such as APD334, a treatment for ulcerative colitis, and ralinepag, a treatment for pulmonary arterial hypertension. Both drugs are in mid-stage studies.

Shares of the company closed at $2.20, having fallen about 37 percent this year.

(Reporting by Natalie Grover and Samantha Kareen Nair in Bengaluru; Editing by Robin Paxton)

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