Item 8.01 Other Events.
On March 21, 2018, we entered into an underwriting agreement (the Underwriting Agreement) with Citigroup Global Markets Inc. and Leerink
Partners LLC, as representatives of the several underwriters named therein (collectively, the Underwriters), relating to the issuance and sale in a public offering of 8,500,000 shares of our common stock, par value $0.0001 per share. The
price to the public in the offering is $41.50 per share and the Underwriters have agreed to purchase the shares from us pursuant to the Underwriting Agreement at a price of $39.2175 per share. The net proceeds to us from the offering are expected to
be approximately $333.1 million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. The closing of the offering is expected to occur on March 26, 2018, subject to customary closing
conditions. In addition, we granted the Underwriters a
30-day
option to purchase up to 1,275,000 additional shares of our common stock at the public offering price, less the underwriting discounts and
commissions. We anticipate using the net proceeds from the offering for the clinical and preclinical development of drug candidates, including our planned Phase 3 programs for etrasimod for the treatment of ulcerative colitis and ralinepag for the
treatment of pulmonary arterial hypertension, for general corporate purposes, including working capital and costs associated with manufacturing services, and for capital expenditures.
The Underwriting Agreement contains customary representations, warranties and agreements by us, customary conditions to closing, indemnification obligations
of Arena and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement
were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by such parties.
The offering is being made pursuant to our registration statement on Form
S-3
(Registration Statement
No. 333-219237),
which became automatically effective upon filing with the Securities and Exchange Commission (SEC) on July 11, 2017, and a prospectus supplement thereunder. A copy of the
Underwriting Agreement is filed as Exhibit 1.1 to this report, and the foregoing description of the terms of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to such exhibit. A copy of the
opinion of Cooley LLP relating to the legality of the issuance and sale of the shares in the offering is attached as Exhibit 5.1 hereto.
On
March 20, 2018, we issued a press release announcing the offering, and on March 21, 2018, we issued a press release announcing that we had priced the offering. Copies of these press releases are attached as Exhibits 99.1 and 99.2
hereto, respectively.
Forward-Looking Statements
Certain statements contained in this report are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements
include, without limitation, statements about our expectations with respect to the completion, timing and size of the public offering; the expected net proceeds from the offering; and our anticipated use of the net proceeds from the offering. Words
such as will, expect, may, goal, potential and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements necessarily contain these
identifying words. For such statements, we claim the protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from our expectations. Factors that could cause actual results to differ
materially from the forward-looking statements include, but are not limited to, risks and uncertainties associated with market conditions and the satisfaction of customary closing conditions related to the public offering. Additional factors that
could cause actual results to differ materially from those stated or implied by our forward-looking statements are disclosed in our filings with the SEC, including our Annual Report on Form
10-K
for the year
ended December 31, 2017. These forward-looking statements represent our judgment as of the time of this report. We disclaim any intent or obligation to update these forward-looking statements, other than as may be required under applicable law.