One month after their anti-obesity drug lorcaserin failed a Phase 3 trial, Arena Pharmaceuticals has “disposed” of 130 humans! According to Arena’s latest 8-K, the company is “committed to a reduction in our U.S. workforce of approximately 31%, or a total of approximately 130 employees.”

Ouch. That’s a lot.

The axes will save Arena $25M, of which all will go to finish developing a drug that (probably) doesn’t work. The drug did meet its primary endpoint of showing a 5% weight loss in patients. The problem was that patients on placebo also lost weight and the drug did not meet its placebo-adjusted endpoint (take a look at Derek Lowe’s rant, with which we agree 100%). BTW, you have to look deep in their press release to find this despite the title saying the drug worked.

We hate when companies do this. It’s a deception bordering on a lie, but whatever.

Arena says they’ll take a $3M severance hit with the cuts, so you know what time it is…MATH TIME!!!!

• A = number of employees axed = 130

• B = severance charge to Arena = $3M

• C = severance/employee = B/A = $23,000

And you know who gets about half of that, right? Yeah, Uncle Sam — that bastard. Taxes suck.

Anyway, Arena said this in their filing:

“Given the challenging economic environment, we believe it is necessary to reduce our cash usage and provide Arena with additional financial flexibility to support our expected filing of a New Drug Application, or NDA, for lorcaserin, our drug candidate for weight management that is being investigated in a Phase 3 clinical trial program, by the end of 2009.”

We say divie up the $25M among all the employees and call it a day…

Image from sbnation

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