Investors cheer as Arena forces out CEO and cofounder

Jack Lief

Arena Pharmaceuticals' ($ARNA) board of directors is getting its way: CEO Jack Lief is hitting the road.

On Monday, Lief retired from the company at the board's request, the California drugmaker said in an SEC filing. Among the benefits he'll take with him: A $1.8 million cash severance payment, 18 months of continued health insurance coverage, and acceleration of the stock options and RSUs that would have vested over the next year and a half.

Harry Hixson, one of the company's directors, will fill in while Arena looks for a replacement.

Lief, who cofounded Arena, has "contributed in many ways" since launching the company in 1997, Hixson said in a statement, overseeing the approval and rollout of obesity therapy Belviq and developing "a robust clinical stage pipeline and productive research platform."

Yet investors cheered the news of his departure following the announcement, sending shares up 5.1%.

The search for a more permanent stand-in will begin immediately, Arena said--and whoever lands in Lief's old spot will have their job cut out for them. Belviq and rival Qsymia from Vivus ($VVUS) recently ceded the top spot in the market for weight-loss meds to new challenger Contrave from Orexigen ($OREX).

It's not too late for Belviq to get back in the game, however: As of the week ended Sept. 11, Contrave held 38% of the market, with Belviq holding down the No. 2 spot with 30% and Qsymia, at 27%, bringing up the rear.

But if it wants to stage a comeback, it'll have to do so with a sales force one-third the size of the one Orexigen's marketing partner, Takeda, has on the ground. Eisai, Arena's own partner, currently has 300 reps in the field--a tally that pales in comparison to the 900-rep army Takeda can boast.

- read Arena's release
- see the 8-K

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