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Why Arena Pharmaceuticals Stock Skyrocketed 80% Today

Why Arena Pharmaceuticals Stock Skyrocketed 80% Today

What happened 

Shares of Arena Pharmaceuticals (NASDAQ:ARNA) soared 80% on Monday soon after the drugmaker struck a merger arrangement with Pfizer (NYSE:PFE)

So what 

Arena is a medical-stage corporation focused on developing therapies for immuno-inflammatory ailments. It has a promising pipeline of drug candidates in parts these as gastroenterology, dermatology, and cardiology.

Probably most promising is Arena’s experimental oral therapy etrasimod. Scientific trials are underway to appraise etrasimod for the treatment of ulcerative colitis, Crohn’s disease, and other ailments.

Pfizer attained an settlement to receive Arena Prescribed drugs. Graphic source: Getty Pictures.

Pfizer is seeking to acquire all of Arena’s exceptional inventory for $100 per share, or marginally extra than double its closing rate on Friday. The all-income deal values Arena at about $6.7 billion. The transaction is anticipated to shut in the initially 50 % of future year, pending regulatory and shareowner acceptance. 

“Pfizer’s abilities will accelerate our mission to provide our significant medicines to individuals,” Arena CEO Amit Munshi reported in a push release. “We believe this transaction signifies the very best next move for both of those patients and shareholders.”

Now what

COVID-19 vaccine sales have introduced an tremendous sum of income into Pfizer’s coffers. The pharmaceutical giant expects to crank out as considerably as $36 billion from its Comirnaty coronavirus vaccine in its 2021 fiscal calendar year. 

Pfizer is wisely selecting to use some of this income to bolster its drug portfolio and very long-phrase expansion prospective clients. That could help to provide new remedies to patients speedier, as effectively as greater returns to investors.

“Utilizing Pfizer’s main investigation and worldwide advancement abilities, we system to speed up the scientific development of etrasimod for sufferers with immuno-inflammatory health conditions,” Pfizer government Mike Gladstone stated.

This posting represents the impression of the author, who may perhaps disagree with the “official” recommendation posture of a Motley Idiot premium advisory services. We’re motley! Questioning an investing thesis — even a single of our personal — assists us all imagine critically about investing and make decisions that assistance us turn out to be smarter, happier, and richer.

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