Arena Pharma Raising Cash, Again?

"Taking money off the table now in advance of the Blossom data removes a financing risk," said Hoffman. (Blossom is the name of the second phase III lorcaserin study.) "We were afraid that the market wouldn't respond to good Blossom data."

Arena ended the first quarter with $70 million in cash, enough to last about nine months at the company's current burn rate. That cash reserve is padded by the Deerfield loan and Tuesday's stock offering.

Arena is counting on a Big Pharma partner for lorcaserin but acknowledges that a deal probably won't be signed until after the Blossom data are released. Still, if the company is so confident about the Blossom data being positive and strong enough to bring in partner willing to fork over big bucks, why sell stock now and dilute shareholders even further?

Hoffman says Tuesday's offering has nothing to do with the company's confidence in landing a lucrative lorcaserin partnership.

Arena shares were down 12% to $4.12 in Tuesday's after-hours trading, indicating investors may not share Hoffman's confidence.