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View Annual Report 2010 Annual Report Focused and Dedicated Prioritizing Lorcaserin Selectively Advancing Our Pipeline 44/14/11/14/11 112:052:05 AM Prioritizing Lorcaserin Lorcaserin for Weight Management After completing two Phase 3 clinical trials which demonstrated that lorcaserin helped patients achieve statistically significant weight loss in a well-tolerated manner, we submitted a New Drug Application (NDA) to the US Food and Drug Administration (FDA) in December 2009. In October 2010, the FDA issued a Complete Response Letter (CRL) regarding the lorcaserin NDA. In the CRL, the FDA stated that it completed its review of the NDA and determined that it could not approve the application in its present form. The FDA also outlined reasons for its decision and provided recommendations for addressing the issues identified in the CRL. In November 2010, we reported top-line results from our third Phase 3 clinical trial, BLOOM-DM, which evaluated lorcaserin for weight management in obese and overweight patients with type 2 diabetes. Lorcaserin met the trial’s three primary efficacy endpoints, and we believe the results favorably support the benefit-risk profile of lorcaserin. We will submit the final study report from the BLOOM-DM trial with the NDA resubmission. We are working to address the FDA’s concerns, and believe that we may be in position to resubmit the lorcaserin NDA by the end of 2011. We have granted Eisai Inc. exclusive rights to commercialize lorcaserin in the United States, subject to FDA approval of the lorcaserin NDA, and we are working closely with Eisai in planning and conducting studies and other activities in support of the lorcaserin NDA resubmission. Lorcaserin Phase 3 Results Lorcaserin 10 mg BID Placebo *p<0.0001, MITT/LOCF 50 47.5%* 47.2%* 40 37.5%* 30 25.0% 20.3% 20 16.1% % of Patients 10 0 BLOOM BLOSSOM BLOOM-DM ≥5% Weight Loss Selectively Advancing Our Pipeline GPR119 for Type 2 Diabetes • Orally active compounds for type 2 diabetes • GPR119 agonists are potentially first-in-class therapeutics targeting this novel pancreatic ͱ-cell receptor • APD597 Phase 1 program —Evidence for increased incretin release (GLP-1, GIP and PYY) —Potential utility in combination with a DPP-4 inhibitor • Patent portfolio covers compounds as well as technologies and tools that are useful in identifying drug candidates targeting this receptor • Pursuing exclusive collaborations for GPR119 agonists and non-exclusive licenses for patent portfolio related to the discovery and development of GPR119 agonists APD811 for Pulmonary Arterial Hypertension (PAH) APD334 for Autoimmune Diseases • APD811 is a non-prostanoid prostacyclin receptor agonist • APD334 is a selective agonist of the S1P1 receptor — Oral drug candidate with potential benefits similar to currently available • S1P1 receptor modulates lymphocyte trafficking and prostacyclin agonists other processes • PAH is a progressive and life-threatening disorder • Intended for the treatment of autoimmune diseases, —Increased pulmonary artery pressure can decrease life expectancy including: — Data indicates that, without treatment, median survival time is approximately —Multiple sclerosis three years from diagnosis —Rheumatoid arthritis • Current treatment • Status: preclinical development —Prostacyclin agonists are standard of care for advanced PAH —Administered frequently or continuously; intravenous, subcutaneous or inhaled • Status: initiated Phase 1 trial in December 2010 4/14/11 12:05 AM Corporate Information Board of Directors Arena will provide stockholders without charge, upon written request, a Jack Lief copy of its annual report on Form 10-K, including the financial statements, schedules and list of exhibits. Arena will furnish stockholders a copy of Chairman, President and Chief Executive Officer any exhibit to such report upon written request and payment of its Arena Pharmaceuticals, Inc. reasonable expenses in furnishing such exhibit. Requests should be sent Dominic P. Behan, Ph.D. to Investor Relations at Arena’s corporate headquarters. Director, Senior Vice President and Chief Scientific Officer In addition, Arena’s annual report on Form 10-K, other filings with the Arena Pharmaceuticals, Inc. Securities and Exchange Commission, and press releases, along with Donald D. Belcher general information on Arena’s business and technology, are available Former Chairman and Chief Executive Officer through Arena’s home page on the Internet at the following address: Banta Corporation www.arenapharm.com. “We remain focused on selectively advancing our pipeline and believe that we have a Scott H. Bice Transfer Agent and Registrar number of exciting opportunities. With lorcaserin, it’s the opportunity to provide a new Robert C. Packard Professor Computershare Investor Services University of Southern California Law School P.O. Box 43070 treatment, initially in the United States and subsequently in other parts of the world, to Providence, Rhode Island 02940-3070 Harry F. Hixson, Jr., Ph.D. Telephone: 800.962.4284 Co-Founders patients who need to lose weight and improve co-morbid conditions associated with Chairman and Chief Executive Officer Facsimile: 303.262.0700 Jack Lief and Dominic P. Behan, Ph.D. obesity. We are also actively seeking collaborators and other licensing opportunities for Sequenom, Inc. our programs.” Tina S. Nova, Ph.D. Stock Listing Arena’s common stock trades on the NASDAQ Global Select Market® under President the symbol ARNA. Genoptix, Inc. Phillip M. Schneider Independent Auditors Dear Stockholders, Former Senior Vice President and Chief Financial Officer KPMG LLP IDEC Pharmaceuticals Corporation 4747 Executive Drive, Suite 600 San Diego, California 92121 2010 was a pivotal year for Arena and our most advanced drug candidate, lorcaserin, which is intended APD597, our internally discovered GPR119 agonist, was evaluated in a Phase 1 program. We believe Christine A. White, M.D. Telephone: 858.750.7100 for weight management. We set out to accomplish certain goals for this program, including to establish APD597 may have utility, possibly in combination with a DPP-4 inhibitor, for the treatment of type 2 Former Senior Vice President, Global Medical Affairs Facsimile: 858.750.7101 Biogen Idec Inc. a collaborative agreement for the commercialization of lorcaserin in the United States, publish our Phase 3 diabetes. In addition to APD597, we have discovered next generation GPR119 agonists, and our broad Service Marks Randall E. Woods clinical trial results in a prestigious medical journal and obtain FDA approval of our lorcaserin NDA. GPR119 patent portfolio covers technologies and tools that are useful in identifying orally active drug Arena Pharmaceuticals®, Arena® and our corporate logo are registered President and Chief Executive Officer candidates targeting this receptor. service marks of Arena. In July, we granted Eisai exclusive rights to commercialize lorcaserin in the United States, subject to FDA Sequel Pharmaceuticals, Inc. approval, under the terms of a marketing and supply agreement. Also that month, the New England We have also prioritized APD811, our prostacyclin receptor agonist intended for the treatment of pulmonary Journal of Medicine published results from our two-year Phase 3 lorcaserin BLOOM trial. Despite these arterial hypertension, and APD334, our S1P1 receptor agonist intended for the treatment of a number of Executive Officers INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS substantial accomplishments, we did not achieve our most important goal for the year: In October, the conditions related to autoimmune diseases, including multiple sclerosis and rheumatoid arthritis. Jack Lief Certain statements in this Annual Report are forward-looking statements that President and Chief Executive Officer involve a number of risks and uncertainties. Such forward-looking statements FDA issued a CRL stating that it could not approve the NDA in its present form and requesting additional include statements about our vision, outlook, strategy, technologies, internal In summary, we remain focused on selectively advancing our pipeline and believe that we have a number information about lorcaserin. K.A. Ajit-Simh and collaborative programs, ability to develop compounds and commercialize of exciting opportunities. With lorcaserin, it’s the opportunity to provide a new treatment, initially in the Senior Vice President, Quality & Regulatory Compliance drugs and our future activities and achievements. These forward-looking statements also involve other statements that are not historical facts, Earlier this year, we realigned our resources with our 2011 corporate priorities and reduced our expenditures. United States and subsequently in other parts of the world, to patients who need to lose weight and Dominic P. Behan, Ph.D. including statements that are preceded by the words “may,” “will,” “intend,” We are focused on the following areas: improve co-morbid conditions associated with obesity. We are also actively seeking collaborators Senior Vice President and Chief Scientific Officer “plan,” “believe,” “expect,” “estimate,” “potential,” “hope,” “continue,” and other licensing opportunities for our programs, including exclusive collaborations for our internally “likely,” “opportunity,” or similar words. For such statements, we claim the 1) Working with Eisai to resubmit the lorcaserin NDA; William R. Shanahan, Jr., M.D., J.D. protection of the Private Securities Litigation Reform Act of 1995. Actual discovered GPR119 agonists intended for the treatment of type 2 diabetes and
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