Arena Pharmaceuticals, Inc. (ARNA)

[clawmann]

Bull: If lorcaserin is approved they won't need to do a secondary ($60 million from Eisai and then product sales will keep them nicely in the green). If lorc is not approved, well, I think we are toast (Arena might be able to sell the rights to lorc or agree to a cheap buy-out).

An increase in the AS does not always mean that a company has a secondary in mind. They did a SEDA agreement not long ago to cover them if they need cash (but I don't think they will use that SEDA if lorc is approved). They may need more shares available for a variety of reasons; they need to be able to issue them if warrants are exercised, in order to offer incentive pay; and it is always wise to have an excess of authorized over issued just in case.

I just flat out don't believe that Arena will do a secondary. If lorc is approved they will have plenty of cash. I am certain that shareholders will ask them questions about the requested increase in the AS, and I would listen very carefully to the answer.