Shares in Arena Pharmaceuticals, Inc.(NASDAQ:ARNA) have shown a spectacular rise fuelling speculation that it could be related to takeover rumours, as per reports from Marketwatch.
On Tuesday the stock gained or than 14 percent to close at $8.26 with about 27 million shares being traded. The stock is showing increased volatility in today’s session and was recently up 1.32% to $8.37. although came off session high of $8.86.
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At this point identifying a reason for the surge would be pure speculation, although some have claimed it was due to "unconfirmed takeover chatter," which basically means nothing, the site said.
Arena is a company focussed on producing anti-obesity drugs. It is right now at a stage with anticipation centred on the DEA scheduling designation process of BELVIQ.
If the process is completed before the end of this year the drug can be made available in the United States when it stands to get $65 million in milestone payments from Eisai, Inc.
However, there are no new developments on that matter and when there are, that would still mean at least two more months before a final scheduling, Hot Stocked said.
The company has marketing authorization application under review in the EU and Switzerland, but the outcome for those territories will become clear in the fourth quarter, at the earliest, the report added.
The report said that the buyout speculation was hard to support at this time, because there are still quite a few uncertainties, surrounding Arena's anti-obesity drug.
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Even if everything goes perfect with the DEA and the reviews in the UE and Switzerland, those are just milestones. BELVIQ being the only FDA approved product of ARNA, the future of the company largely depend on how the drug performs on the market, it said.
Shares of other related companies are showing high volatility with VIVUS, Inc.(NASDAQ:VVUS) is now down 1.70% after 7% in yesterday’s session and Orexigen Therapeutics, Inc.(NASDAQ:OREX) fell 3%.