Merrill Lynch's Global Pharmaceutical, Biotechnology, and Medical Device Conference. February 7, 2007

Transcription

1 Merrill Lynch's Global Pharmaceutical, Biotechnology, and Medical Device Conference February 7, 2007

2 Information related to forward-looking statements This presentation includes forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements include statements about the potential of our compounds, when, whether and how we expect to continue developing compounds, including lorcaserin, APD125, APD791 and our partnered compounds, upcoming milestones and news, potential drug candidates, the therapeutic potential of GPCRs, our strategy, technologies, preclinical and clinical programs, our ability to identify and develop drugs, future opportunities, potential achievements, goals and expectations, and other statements that are not historical facts, including statements which may be preceded by the words potential, believe, expect, predict, continue, likely, unlikely, anticipate, estimate, optimistic, sustainable, intend, plan, project, target, aim, will, may, unlikely to be, and similar words. For such statements, we claim the protection of the Private Securities Litigation Reform Act of You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the time they were made. Actual results could differ materially from our forward-looking statements due to, among other reasons, preclinical and clinical development is highly uncertain, the success and cost of our research, clinical studies and partnering endeavors, our ability to obtain additional financing, our clinical trials may not proceed at the time we expect or at all, the timing of payments and fees, if any, from our collaborators, and our ability to obtain and defend patents. Additional factors that could cause actual results to differ materially from those stated or implied by our forward-looking statements are disclosed in our SEC filings. We disclaim any intent or obligation to update these forward-looking statements, other than as may be required under applicable law. 2

3 Focused on discovering, developing & commercializing innovative oral drugs Lorcaserin for obesity Phase 3 BLOOM trial underway Emerging pipeline of NMEs Oral medicines for large, primary care markets Attractive partnerships Ortho-McNeil and Merck Integrated R&D infrastructure Focused on GPCR targets Multiple expected near-term milestones DSMB report for lorcaserin 3

4 G Protein-Coupled Receptors Broad therapeutic potential Cell surface receptors that mediate majority of cell-to-cell communication Hundreds of GPCRs not targeted by current drugs Selective targeting of specific GPCRs Maximizes likelihood of intended pharmacology Minimizes risk of off target effects Validated target class ~40% or more of all drugs target GPCRs 4

5 Pipeline of promising drug candidates Program / Indication Research* Preclinical Phase 1 Phase 2 Phase 3 Lorcaserin Obesity APD125 Insomnia APD791 Thrombosis APD668 Type 2 Diabetes Ortho-McNeil MK-0354 Undisclosed indication Niacin Receptor Agonists HDL Merck Merck Wakefulness promoter Type 2 diabetes & obesity Cardioprotection Next IND Candidate Cytokine & immune cell modulators *Representative of Arena s research programs. 5

6 Lorcaserin is a promising oral drug candidate for obesity BLOOM trial initiated September 2006 Pivotal two-year trial of 3,182 patients Phase 2 trials of over 800 patients showed: Progressive, meaningful and dose dependent weight loss High rate of response Well-tolerated Market Need More than 30% of Americans are obese 1 Economic cost: $117 billion in the U.S. per year 2 Obesity accounts for +2.6 million deaths worldwide 3 References 1. Adults 20+over, Center for Disease Control & Prevention, Estimated annual cost, Center for Disease Control & Prevention, Deaths in 2000, World Health Organization,

7 Lorcaserin is a novel and selective compound 5-HT2C receptor is a validated target Located in the hypothalamus Regulates satiety May affect metabolic rate NME that selectively targets the 5-HT2C receptor ~100-fold selectivity over 5-HT2B receptor ~15-fold selectivity over 5-HT2A receptor Fenfluramine is a non-specific serotonin receptor agonist Potential to activate all 14 known serotonin receptors Removed from the market in

8 Lorcaserin Comparison of Lorcaserin and Dexfenfluramine EC-50 5-HT2A (nm) 5-HT2B (nm) 5-HT2C (nm) Molecular Weight Half Life (hr) Lorcaserin Dexfenfluramine * *The EC-50 data for dexfenfluramine are those of nordexflenfluramine, the active metabolite of dexfenfluramine. 8

9 Lorcaserin Phase 2b trial Demonstrated significant weight loss 12-Week Trial Completed Patients Design Echo Results December parallel groups No diet or exercise advice 10 mg, 15 mg & 20 mg daily dose for 12 weeks Echocardiograms at baseline and end of study Highly significant weight loss and reduction in BMI and waist+hip circumference Well tolerated with no apparent drug effects on heart valves or pulmonary artery pressures; 71% retention rate 9

10 Lorcaserin Phase 2b trial Dose-dependent & progressive weight loss Study Day stop study drug 0-1 Weight Change From Baseline (kg) -2-3 * * Placebo Lorcaserin 10 mg Lorcaserin 15 mg Lorcaserin 20 mg -4 *p=0.002; p<0.001 mean ± sem Completer subset analysis 10

11 Lorcaserin Phase 2b trial Significant number of patients lost 5% from BL *p=0.015; p<0.001 Completer subset analysis 25 % of Patients with 5% Weight Loss * Placebo 10 mg 15 mg 20 mg 11

12 Lorcaserin Phase 2b trial High response rate & dose-dependent weight loss 5 Placebo 5 Lorcaserin 10 mg % wt change 0 % wt change Lorcaserin 15 mg 5 Lorcaserin 20 mg % wt change 0 % wt change

13 Lorcaserin Phase 2b Generally well tolerated at doses investigated Adverse Events (>5% of Patients in Any Group) Adverse Event Placebo 10 mg 15 mg 20 mg Headache Nausea Dizziness URI Nasopharyngitis Dry Mouth Diarrhea Fatigue Vomiting UTI Dyspepsia

14 Lorcaserin Phase 2b trial No greater FDA valvulopathy incidence in lorcaserin group Placebo (n=99) 10 mg (n=99a, 100M) Lorcaserin 15 mg (n=96) 20 mg (n=96) Aortic (A) Regurgitation (trace to mild) -- Mitral (M) Regurgitation 2 (1 mild to mod) (1 mild to mild-mod) -- 1 (mild to mild-mod) -- By Dose 2.0% % -- By Treatment 2.0% 0.7% FDA valvulopathy ( Mild AR; Moderate MR) rate higher in placebo vs. combined lorcaserin groups No two-category shifts; One category shifts uniformly distributed No evidence in preclinical studies of effects on heart valves or pulmonary vasculature after up to 12 months at high doses 14

15 Registration plan for lorcaserin year BLOOM Pivotal Phase 3 1-year Pivotal Phase 3 1-year Pivotal Phase 3 Other Phase 3 Studies NDA 2009 Market

16 APD125 A promising oral drug candidate for insomnia Selective MOA: may lead to fewer side effects Phase 1: evidence of improved sleep maintenance Emerging attractive tolerability profile APD125 to enter Phase 2 trial Market Need million Americans suffer from a sleep disorder 1 Patients with sleep disorders are at higher risk of health effects 1 Insomnia is a multi-billion market 2 despite low awareness about the burden of sleep loss among the general public 1 References 1. Institute of Medicine, Data Monitor,

17 APD791 for arterial thrombosis Highly selective 5-HT2A receptor inverse agonist inhibits serotonin-mediated thromboembolic processes Potential to improve therapeutic index Improved separation of inhibition of thrombosis vs. increased bleeding relative to existing therapies (preclinical data) Phase 1 start pending completion of preclinical studies Market Need 2005 worldwide sales of Plavix totaled $5.9 billion 1 The second best selling drug worldwide 1 References 1. IMS Health, Inc. 17

18 Ortho-McNeil diabetes partnership GDIR agonists for type 2 diabetes GDIR agonists are first-in-class therapeutics targeting a novel pancreatic beta cell receptor Orally active compounds stimulate insulin release without causing hypoglycemia Activation of GDIR may have both acute and long-lasting beneficial effects on insulin release Lead compound APD668 in Phase 1 Market Need Diabetes affects ~200 million people worldwide 1 Diabetes is the sixth-largest cause of death in the U.S. 2 One million new cases of diabetes are diagnosed each year 3 References 1. International Diabetes Federation, Center for Disease Control and Prevention, Center for Disease Control and Prevention,

19 Merck niacin receptor partnership Agonists for atherosclerosis & other disorders Three novel GPCR targets for atherosclerosis and other disorders Targets believed to play role in regulating plasma lipid profiles Phase 1 trial program generally well tolerated at all doses $82.5 Million pre-commercial payments plus royalties Market Need Atherosclerosis is implicated in about 3/4 of all deaths from cardiovascular disease 1 According to AHA, higher HDL is better 1 About 26% of the U.S. population has HDL <40mg/dL 1 References 1. American Heart Association 19

20 Arena finances * For the nine months ended Sept. 30, 2006 (in millions) Total Revenues Expenses: Research and development General and administrative Amortization of acquired technology Total operating expenses Interest and other income, net Net loss Allocable to Common Stockholders Balance Sheet Data: Cash, cash equivalents and short-term investments Total Assets Total Stockholders Equity $ $(51.9) $ $235.3 * Prior 12/31/06 guidance for cash, cash equivalents and short-term investments, plus net proceeds from December 2006 financing $

21 Expected upcoming events Obesity DSMB month 6 report from BLOOM trial Insomnia Initiate APD125 Phase 2 chronic insomnia trial Thrombosis Initiate APD791 Phase 1 clinical trial Pipeline Announce next IND candidate Partnered Announce progress on partnered programs -- Ortho-McNeil and Merck 21

22 Merrill Lynch's Global Pharmaceutical, Biotechnology, and Medical Device Conference February 7, 2007