Arena Pharmaceuticals (ARNA) shares jumped early Tuesday after the San Diego-based company announced a global licensing agreement with a unit of Johnson & Johnson (JNJ) to develop treatments for type 2 diabetes and other disorders.
Under terms of the deal, Arena will receive an upfront payment of $17.5 million as well as research funding of $4.8 million over two years. The company could receive up to $295 million in additional payments as well as double-digit royalties if other developmental and sales milestones are achieved. Arena said it expects the initial focus will be on two Arena-discovered molecules in preclinical development. For Johnson & Johnson, the Arena transaction follows a mega-deal with Guidant (GDT) in which the Indiana-based device maker agreed to be acquired by the New Jersey health care giant for $76 a share in cash and stock. Arena also has a collaborative arrangement with Merck(MRK). Arena shares rose 63 cents, or 11%, to $6.43 in premarket trading.>To order reprints of this article, click here: ReprintsTheStreet Premium Services For Personal Service: 877-471-2967
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