Pfizer Inc. recently announced that it would purchase Arena Pharmaceuticals Inc. for USD 6.7 billion in an all-cash deal. This agreement will expand Pfizer’s treatment pipeline and add a potential candidate that focuses on diseases affecting the stomach and intestine.

The offer of USD 100 per share is twice Arena stock’s previous closing price, which rose by 83.7% to USD 91.92 in early trading.

Last month, Pfizer had acquired Trillium Therapeutics Inc., an immuno-oncology company, for around USD 2.22 billion to boost its stock of blood cancer therapies.

Notably, the latest deal will allow Pfizer to access Arena’s etrasimod, a drug that is being examined in a mid-to-late-stage trial in Crohn’s disease, and in a late-stage study in ulcerative colitis. Both these forms of inflammatory bowel diseases are the cause of ulcers in digestive tracts.

If etrasimod gains all clearance, Pfizer could grab a substantial portion of global inflammatory bowel disease market worth USD 20 billion.

It is worth noting that at the beginning of this year, the U.S. Food & Drug Administration authorized Bristol Myers Squibb’s Zeposia for treating ulcerative colitis.

Market analysts reported that etrasimod generated robust data in a mid-stage trial which seemed much better as compared to Zeposia and has other convenience advantages like dose adjustments, and early onset of relief that could help stand out from competitors.

Moreover, etrasimod has the potential to be a top-rated drug and its estimated risk adjusted revenue is around USD 3.8 billion.

Parallelly, Pfizer has been developing an effective treatment for ulcerative colitis, an inflammatory bowel disease that affects over 3 million people in the U.S. The candidate is presently in a mid-stage study which is expected to be concluded by the end of 2022.

The acquisition deal is anticipated to close in the first half of 2022, cited sources with knowledge of the matter.

Source Credit: https://www.fxempire.com/news/article/pfizer-to-acquire-arena-pharmaceuticals-in-6-7-billion-deal-838449