SAN DIEGO (AP) -- Obesity-drug developer Arena Pharmaceuticals Inc. said Wednesday it will sell 11 million shares of its stock for $5.50 per share.
Arena said it expects to raise $60.5 million from the sale before underwriting discounts and expenses are deducted. The underwriters of the sale will have the option to buy another 1.7 million shares over the next 30 days to cover any over allotments. Arena said it plans to use the money it raises for general corporate purposes, including sales of its drug lorcaserin it is approved, along with research and development expenses, capital spending, and general and administrative expenses.
Arena said it expects the sale to close Monday.
The offering priced at a discount of 9.2 percent to Arena's Tuesday closing price of $6.06. The company had 182.5 million shares on the market as of May 1, 2012, and its stock has traded between $1.23 and $7.02 in the last 52 weeks.
Shares of Arena fell 39 cents, or 6.4 percent, to $5.67 in afternoon trading.
Earlier this month a Food and Drug Administration panel said Arena's drug lorcaserin should be approved for sale. That recommendation came despite a variety of safety concerns including the possibility of increased blood pressure and a link to tumors in rats during preclinical studies. The FDA is scheduled to make a ruling by June 27, and while it does not have to follow the advice of its panels, it often does so.
Arena Pharmaceuticals stock jumped 74 percent Friday after the panel made its recommendation.