Arena Pharma Raising Cash, Again?

Arena Pharmaceuticals(ARNA Quote) borrowed $100 million from hedge fund Deerfield Capital Management last month. In explaining the reason for taking on the new debt, Arena management told investors that the deal provided the company with the cash it needed to negotiate with any and all Big Pharma partners seeking a piece of its experimental obesity drug.

But, if that's true, why does Arena find it necessary to raise even more money -- and dilute existing shareholders in the process?

The San Diego-based drugmaker announced Tuesday another public offering of common stock, this time from an existing shelf registration statement covering the sale of 25 million shares. ...