Pfizer to acquire biotech firm Arena for $6.7 billion

Seeking to add firepower to its efforts to develop autoimmune disease drugs, Pfizer will acquire Arena Pharmaceuticals for about $6.7 billion. Arena’s portfolio includes several development-stage drug candidates, including lead candidate etrasimod, an oral, selective sphingosine 1-phosphate receptor modulator currently in Phase 3 clinical trials for ulcerative colitis and a Phase 2/3 trial for Crohn’s disease. Analysts say the deal will boost Pfizer’s pipeline in inflammation and immunology drugs and diversify the firm beyond Janus kinase inhibitors, inflammation drugs that have come under increasing scrutiny. The US Food and Drug Administration requires new heart safety and cancer warnings for several drugs in the category, including one from Pfizer. Pfizer’s agreement to pay $100 per share for Arena, double its previous closing price, is reasonable, especially given prospects for etrasimod, according to a note from stock analysts at Mizuho Securities. The price premium is mitigated by Pfizer’s profits from the COVID-19 vaccine it developed in partnership with BioNTech, the Mizuho analysts write.