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Monday, September 25, 2006

Arena Pharmaceuticals Dumped By Merck on Atherosclerosis

Arena Pharmaceuticals (ARNA) was notified by Merck (MRK) that the drug giant has pulled out of its current partnership to develop an experimental drug for atherosclerosis after results from a mid-stage clinical trail.

Merck made the decision to discontinue development of MK-0354 following completion of a randomized, double-blind, placebo-controlled Phase 2 clinical trial that evaluated patients with dyslipidemia. Although MK-0354 is no longer being developed for the treatment of atherosclerosis, preclinical studies are underway to explore other possible indications for this compound. Also, exploration of additional investigational niacin receptor agonists for the treatment of atherosclerosis and related disorders will continue under the partnership.

ARNA's stock has fallen 7% after-hours and its trading now at $11.39. Its 52-week trading range is $8.80 to $20.68, and all of the copany revenues so far appear to be grant and milestone monies. Arena had a market cap of $580 million and only trades an average of 529,000 shares per day.

There are complementary quotes from both companies below, but these sure feel like the feel-good comments before a divorce where parents tell their kids everything is fine and not to worry.

"The data from the clinical trials of MK-0354 have provided valuable information and add to our understanding of the niacin receptor as we continue to evaluate its therapeutic potential," said Jack Lief, President and Chief Executive Officer of Arena. "We are pleased that, together with Merck, we will continue to conduct research to assess the therapeutic potential of MK-0354 and other niacin receptor agonists."

"We look forward to further evaluating the therapeutic potential of niacin receptor agonists through our partnership with Arena," said Kathleen Metters, Ph.D., Senior Vice President, Basic Research, Merck Research Laboratories.

While they are supposedly exploring more ongoing developments and studies, it is too bad that the trial didn't show strong enough results here. Atherosclerosis is always a potential for a blockbuster drug because it is the collection of fatty material deposits, such as cholesterol, along artery walls that eventually leads to arterial blockage and is the cause of about 3 of every 4 deaths in cardiovascular disease.

Jon C. Ogg
September 25, 2006
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