Arena Pharmaceuticals : Corporate Presentation October 2020

October 2020 • Nasdaq: ARNA

Forward Looking Statements

This presentation includes forward-looking statements that involve a number of risks and uncertainties, including statements about the Arena investment thesis, catalysts, value, our investigative stage drug candidates, including with respect to their potential (including to become first or best-in-class), safety, efficacy, indications, significance of data, development plans, differentiation, the market and unmet needs, commercialization, expected data readouts, initiation and progress of clinical trials and regulatory approval; our focus, goals, strategy, plans, timelines and guidance; our partnered programs; financial and other guidance; and other statements that are not historical facts, including statements that may include words such as "can," "may," "will," "intend," "plan," "expect," "believe," "potential," "opportunity," "up to" or other similar 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 expectations, and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the time they were made. Factors that could cause actual results to differ materially from such statements include, without limitation: Drug development programs are expensive, time consuming, uncertain and susceptible to change, interruption, delay or termination; the timing and outcome of research, development and regulatory review and feedback is uncertain; we expect to need additional funds to advance all of our programs, and you and others may not agree with the manner in which we allocate our resources; topline data may not accurately reflect the complete results of a particular study or trial; results of clinical trials and other studies are subject to different interpretations and may not be predictive of future results; new data may be unexpected or unfavorable; our drug candidates may not advance in development or be approved for marketing; clinical trials and other studies may not proceed at the time or in the manner expected or at all; enrolling patients in our ongoing and intended clinical trials is competitive and challenging; the duration and severity of the recent coronavirus disease (COVID-19) pandemic, including but not limited to the impact on Arena's clinical operations, the operations of Arena's suppliers, partners, collaborators, licensees, and capital markets, which in each case remains uncertain; clinical and nonclinical data is voluminous and detailed, and regulatory agencies may interpret or weigh the importance of data differently and reach different conclusions than Arena or others, request additional information, have additional recommendations or change their guidance or requirements; data and information related to our programs may not meet regulatory requirements or otherwise be sufficient for further development, regulatory review, partnering or approval at all or on our projected timeline; other risks related to developing, seeking regulatory approval of and commercializing drugs, including regulatory, manufacturing, supply and marketing issues and drug availability; Arena's and third parties' intellectual property rights; competition; reimbursement and pricing decisions; risks related to relying on partners and other third parties; and satisfactory resolution of litigation or other disagreements. Additional factors that could cause actual results to differ materially from those stated or implied by our forward-looking statements are disclosed in our Securities and Exchange Commission (SEC) filings, including under the heading "Risk Factors." We disclaim any intent or obligation to update these forward-looking statements, other than as may be required under applicable law

October 2020 • 2

Value Creation Over the Past 4 Years

2016 / 2017

Reset initiated / new management, scaling teams and Board refreshment

Spin-out discovery research (Beacon)

Clean up financial health

FINANCING $75 M

Ralinepag Positive Ph 2 Data (PAH)

FINANCING $162 M

Strategic deal with Everest

Turnover shareholder base from majority retail to +80% institutional

2018

Etrasimod Positive Ph 2 Data (UC)

FINANCING $383 M

Strategic deal with

Outpost Medicine

Olorinab Positive Ph 2a Data (GI Pain)

Ralinepag Positive Long-Term Data (OLE)

Continue to scale company, opened BOS office

2019

Etrasimod Positive Long- Term Data (OLE)

Completed UTHR deal for ralinepag ($800M upfront)

Initiation of key trials:

• ELEVATE UC (Ph 3 in UC)
• CAPTIVATE (Ph 2b in IBS)
• ADVISE (Ph 2b in AD)
• CULTIVATE (Part of Ph 2/3 in CD)

2020

Expanded multi-program collaboration with Beacon for I&I targets (Project Cabrillo)

Formation of Arena Neuroscience (microglial neuroinflammation)

Positive Ph 1 Data for Etrasimod Controlled-Release (CR)

Key trial updates:

• APD418 (Ph 1 in AHF) Initiation / Fast- Track Designation
• ADVISE Full Enrollment
• Initiation Alopecia Areata (Ph 2)
• Initiation of ELEVATE UC 12 (Ph 3)
• CAPTIVATE Full Enrollment

FINANCING $302 M

~$1.3 B*

Cash

*Cash, cash equivalents and investments as of 6/30/20

October 2020 • 3

Multiple Ph 2 & Ph 3 Data Readouts Expected Across Potential Best-in-Class Pipeline

Today

Etrasimod:

Potential Best-in-Class

• UC Ph 3
• CD Ph 2/3
• AD Ph 2b

Olorinab:

Potential First-in-Class

• IBS-Cand IBS-D Pain Ph 2b

APD418:

Potential First-in-Class

• AHF Ph 1

Ralinepag Partnership*

Architecting the Future

Expanding Value:

Robust Lifecycle Plan for Etrasimod

• Potential new indications - EoE & AA

Unlocking Value:

Sustainable Pipeline from historical GPCR platform

• Project Cabrillo collaboration with Beacon Discovery
• Arena Neuroscience

2020-22 Data Catalysts Expected***

Pipeline:

4	8	4
Clinical stage	Preclinical
Diseases
assets**	assets

1	3
IND each	Therapeutic
year	areas

8 data readouts:

2	6
Ph 3	Ph 2

*$800M upfront payment, up to $400M milestones & low double-digit tiered royalties
**Does not include ralinepag or OP-352
***Catalysts may be dependent on COVID-19 pandemic	October 2020 • 4

Deep Pipeline with Therapeutic Focus

Pipeline of Potential First-in-Class /Best-in-Disease Assets				Arena Neuroscience Platform -
							Microglial Neuroinflammation Targets
INTERNAL PROGRAMS:		PRE-CLIN. PHASE 1 PHASE 2	PHASE 3
				LEAD OPT	PRE-CLINICAL	PHASE 1
Etrasimod GI	ELEVATE UC 52	Ph 3
		ELEVATE UC 12	Ph 3				AN352
		Crohn's Disease (CD)	Ph 2 / 3				AN143
		Eosinophilic Esophagitis (EoE)	Ph 2b Planning				AN659
	Derm	ADVISE (Atopic Dermatitis)	Ph 2b				Additional
		Alopecia Areata (AA)	Ph 2
					Targets
	CR	Controlled-Release	Life Cycle Management

Olorinab	GI	Pain with IBS	Ph 2b				Project Cabrillo - Early Stage Immune
			& Inflammatory Platform w/ Beacon
		Pain with IBD	Ph 2b Planning
								DISCOVERY	HIT-TO-LEAD	LEAD OP	IND
APD418	CV	Acute HF (AHF)	Ph 1					ENABLING
							Target 1
LICENSED OR PARTNERED:
							Target 2
Ralinepag	UTHR	PAH	Ph 3
							Additional
							Targets

October 2020 • 5

Catalyst Horizon

H2 2020

H1 2021

H2 2021

H1 2022

H2 2022

Etrasimod

Olorinab

Etrasimod

Etrasimod

Complete ELEVATE

CAPTIVATE (IBS Pain)

ELEVATE UC 12

UC

UC 52 Enrollment

Ph 2b Data

Ph 3 Data

NDA Submission

Etrasimod

Etrasimod

ADVISE (AD)

ELEVATE UC 52

Ph 2b Data

Ph 3 Data

APD418

Etrasimod

AA

Ph 1 Data

Ph 2 Data

!

COVID-19

Etrasimod

Etrasimod

Etrasimod

IMPACTED /

CULTIVATE (CD)

EoE

CD

TIMELINES

Ph 2 Data

Ph 2b Data

Ph 3 Data

DEPENDENT

APD418

Ph 2a Data

New IND(s)

 GI  Derm  GI / Pain  CV  I&I/Neuro

October 2020 • 6

Arena Neuroscience - Microglial Neuroinflammation Platform

Scientific Rationale:

Programs:

LEAD OPT

PRE-CLINICAL

PHASE 1

Disease Stimulus

mSOD (ALS)

α-Synuclein (PD)

Aβ, tau (AD)

Sentinel Microglia

Activated Microglia

Neuroinflammation

• Sentinel microglia encounter aberrant proteins like:
• • mSOD (ALS)
  • α-Synuclein(Parkinson's
    Disease)
  • Aβ (Alzheimer's Disease)

resulting in activated microglia

• These proteins lead to exaggerated neuroinflammatory response & potential neurodegeneration
• Opportunity for therapeutic intervention along neuroinflammation axis

Microglial Targets:

AN 352

AN143

AN659

Additional Targets

1. Strategic positioning through early stage development Evaluate potential spin-outand external investment options

October 2020 • 7

Expanded Multi-target GPCR Relationship with Beacon Discovery

Novel Immune and Inflammatory Research:

• Early research program with Beacon Discovery to discover and develop novel compounds with multiple GPCR targets/MOAs
• Strengthens Arena's early-stage GI portfolio
• Preclinically validated targets using Arena's historical platform
• Implementing strategic experiments to identify disease indications that are involved with gut, gut homeostasis, gut barrier function and healing, immune cell balance, etc.

Early Stage Programs:

DISCOVERY	HIT-TO-LEAD	LEAD OPT	IND ENABLING

I&I Targets:

Target 1

Target 2

Additional Targets

1. Expanded Relationship Designed to Unlock Value From Arena's
   Historical GPCR Research Engine
   Focused on broad portfolio expansion over the next 5-7 years, and generating additional pipeline assets / catalysts

October 2020 • 8

Etrasimod

Investigational, Oral, Next Generation, S1P Receptor Modulator with Potential for Optimized Activity Being Evaluated for Multiple Immune- Mediated Inflammatory Diseases (IMID), Targeting ~$48B Market with Current Indications

Etrasimod Potential Best-in-Class S1P Receptor Modulator with Opportunity for Broad Applicability

Etrasimod Intrinsic Design Features

Receptor Pharmacology	Pharmacodynamics	Control	Convenience
Highly specific S1P1,4,5	Rapid On-Rate	Strong durable remission rates	Oral, once-daily
No evidence of off-target	(treating flare)	observed and generally well	Minimal monitoring
	tolerated safety with no titration
activity / deleterious barrier	Rapid Off-Rate	expected
function due to S1P2,3	(infection control)	No elevated LFTs, abnormal	No titration
		PFTs, macular edema

~$48B Market Opportunity Across Current Pipeline

Source: 1. Arena Quantitative Market Research, March 2018.;	2. Dahlhamer JM, et al. MMWR Morb Mortal Wkly Rep 2016;65:1166-1169.; 3. UC & CD Disease Landscape & Forecast
Reports. DRG. 2018	October 2020 • 10

Etrasimod Designed to Offer Control with Faster Offset & Onset

Ozanimod1 

Half Life:

~10-13 Days*

Mean % Change in Lymphocyte Count
30							At 2 weeks
20
10							lymphocyte only
0
-10							~60% recovered
-20
-30
-40
-50
-60							 Ozanimod 1 mg
-70
-80							(Fixed)
1	8	15	22	29	36	43
			Study Day				 Placebo

Mean % Change from Baseline					At Day 3,
30
20													ozanimod
10
0													showed ~15%
-10
-20													reduction
-30
-40
-50
-60													 Ozanimod, 2 mg
-70
-80													(Dose Escalation*)
-1	0	1	2	3	4	5	6	7	8	9	10	11
				Study Day							 Placebo

Etrasimod2 

Half Life:

~1-1.5 Days

Note:

No direct head-to-head data available - Caution advised when comparing data across clinical studies

Mean % Change in Lymphocyte Count
30								Within 1 week
20
10								lymphocytes
0
-10								~95% recovered
-20
-30
-40
-50
-60
-70								 Etrasimod, 2 mg
-80								(Fixed)
1	5	7	9	15	21	23	28
 Placebo
				Study Day

Mean % Change from Baseline					At Day 3,
30
20																	etrasimod
10
0																	showed ~53%
-10
-20																	reduction
-30
-40
-50
-60
-70																	 Etrasimod, 2 mg
-80																	(Fixed Dose)
-1	0	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15
 Placebo
						Study Day

Source: 1-Tran JQ et al, J Clin Pharmacol. 2017;57:988-9962- ADP334 P1 Data on File. 3- ADP334 P1 Data on File; *Active metabolite; *After dose escalation of ozanimod (0.3 mg/d on
days 1-3; 0.6 mg/d on days 4 and 5; 1 mg/d on days 6 and 7; and 3 mg/d on days 8-10. Data truncated at day 11 (ozanimod) and 15 (etrasimod) to show on-treatment onset effects	October 2020 • 11

Etrasimod

Controlled-

Release (ECR)

Program -

Further

Differentiates

Etrasimod

Proactive life-cycle management strategy designed to further differentiate etrasimod and create additional intellectual property

CR program designed to retain rapid onset while further improving its potentially best-in-class,non-titrated, low intrinsic first-dose HR effect

Positive topline data from Ph1 study demonstrated significant reduction in HR effect

• Etrasimod has class-leadingnon-titrated HR effect, and lowest intrinsic effect on GIRK channel
• Etrasimod CR delivery enabled a greater than 75% reduction in the average heart rate effect of etrasimod during its 4-hour monitoring period, with heart rate slowing by only low single digits from baseline with no titration
• No cases of AV block were reported at any time point in the study. No adverse events related to heart rate, blood pressure or other cardiac events were reported during the study. The rest of the safety profile was consistent with etrasimod's historical safety profile

Life-cycle management, potentially extending etrasimod's IP portfolio

We intend to pursue initial regulatory approval UC with etrasimod and move to etrasimod CR with other ongoing and future development programs including dermatologic indications

October 2020 • 12

Etrasimod in Gastrointestinal Conditions

Ulcerative Colitis (UC),

Crohn's Disease (CD) &

Eosinophilic Esophagitis (EoE)

Etrasimod Has the Potential Opportunity to Create a New Standard of Care Across

a Spectrum of GI Conditions

Ulcerative	Crohn's	Eosinophilic
Colitis	Disease	Esophagitis

i Adult patients with moderately to severely active	i Potential First-
disease who have had inadequate response, lost	Line therapy
response or are intolerant to either conventional therapy,
biologic agents or JAKi therapy

IBD Market Opportunity

Large number of potential patients

Associated with high cost and overall disease burden

Competition with distinct limitations

High unmet need for novel treatment options including orals

EOE Market Opportunity

High unmet need for novel oral non-steroid options

Increasing recognition of disease with limited competition

October 2020 • 14

Etrasimod Potential Best-in-Disease S1P Receptor Modulator with Broad Potential Applicability

60-80%

of IBD patients

currently not in

remission at 1 Year1,2

Etrasimod Intrinsic Design Features

Receptor Pharmacology

• Highly specific S1P1,4,5
• No evidence of off-target activity

Control

• Strong durable remission rates observed and generally well tolerated safety with no titration
• No elevated LFTs, abnormal PFTs, macular edema

Pharmacodynamics

• Rapid On-Rate (treating flare)
• Rapid Off-Rate (infection control)

Convenience

• Oral, once-daily
• Minimal monitoring expected

$24B+ Market Opportunity Across GI

Source: 1. Arena Quantitative Market Research, March 2018.;	2. Dahlhamer JM, et al. MMWR Morb Mortal Wkly Rep 2016;65:1166-1169.; 3. UC & CD Disease Landscape & Forecast
Reports. DRG. 2018	October 2020 • 15

JAK Specificity Has Not Translated into Differential UC Efficacy or

Safety for the Class

Upadacitinib

• Narrow therapeutic windows and low margin for toxicity relegate JAK label in UC to TNF failure patientsa
• JAK effect in UC is unremarkable & consistent with 10-point delta from PBO seen across all MOA's in UCb
• All JAK's, including Filgotinib, demonstrate > GI Perforation SIE, HZ & VTE: Class Boxed WarningLabel for Tofacitinib has TNF fail first labelc
• Patients with IBD have a 2x increased risk of VTE, and have a greater risk of GI perforation during colonoscopyd
• All JAK's demonstrate changes in Hb, ANC, ALC, and LFT's which require routine monitoringe
• Filgotinib 200 mg arm excluded US males which is 50% of total UC populationf
• Death due to exacerbation of asthma which translates negatively to future use in atopic dermatitisg

Tofacitinib

Upon initial approval by the FDA in 2012, a post-marketing clinical trial (NCT02092467) was required to evaluate safety at two doses (5 mg, 10 mg; BID) in comparison to a TNF blocker control. Based on interim results, the 10 mg BID treatment was stopped on the account of increased occurrence of blood clots and of death.Regulatory communications followed, noting the increased safety risk reflected in the respective drug label(s).

During the FDA's primary clinical review, it was determined that the risk of thrombosis, among other safety attributes, were considered classeffects of JAK inhibitors, and that given the uncertainties as well as accruing evidence surrounding class safety effects, the product labeling was ultimately given a Boxed Warning with language specifying thrombotic risk.

Footnotes aXELJANZ/XELJANZ XR (tofacitinib). USPI. 12/2019 bXELJANZ/XELJANZ XR (tofacitinib). 12/2019; HUMIRA (adalimumab). USPI. 3/2020; REMICADE (infliximab). USPI. 5/2020; ENTYVIO (vedolizumab).

USPI. 3/2020; SIMPONI (golimumab). USPI. 9/2019; cXELJANZ/XELJANZ XR (tofacitinib). USPI. 12/2019; RINVOQ (upadacitinib). USPI. 8/2019; OLUMIANT (baricitinib). USPI. 11/2019 d Alotaibi GS, et al. Am J October 2020 • 16 Med. Yuhara H, et al. Aliment Pharmacol Ther 2013. Navaneethan U, et al. J Crohn's and Colitis, 2011. e XELJANZ/XELJANZ XR (tofacitinib). USPI. 12/2019; RINVOQ (upadacitinib). USPI. 8/2019; OLUMIANT

(baricitinib). USPI. 11/2019; INREBIC (fedratinib). USPI. 8/2019; JAKAFI (ruxolitinib). USPI. 1/2020 fRBC GILD GLPG Capital Markets Report, May 20, 2020. gGalapagos NV. Phase 2b/3 SELECTION Press Release. Accessed May 2020.

Etrasimod Efficacy in Ulcerative Colitis

Note: No direct head-to-head data available Caution advised when comparing data across clinical studies

Patients with TMCS ≤ 2 points and No Subscore > 1 point

50%
										= 23.9%
40%											38.8%
	= 18.7%
30%
	24.5%	= 10.3%	= 11.5%	= 7.2%	= 10.3%
20%			18.5%		16.9%		16.5%		16.4%
							14.9%
10%		8.2%				9.3%
6.0%			5.4%				6.2%
Pbo	2mg	Pbo	10mg	Pbo	300mg	Pbo	160/80mg	Pbo	1mg	Pbo	5mg/kg
N=54	N=50	N=112	N=429	N=149	N=225	N=246	N=248	N=65	N=67	N=121	N=121
0%
Etrasimod Phase 2	Xeljanz® Phase 3	Entyvio® Phase 3	Humira® Phase 3	Ozanimod Phase 2	Remicade® Phase 3

Source: Etrasimod: Post-hoc analysis. =% difference from placebo estimated using Mantel-Haenszel method adjusted with current oral corticosteroid use and prior exposure to TNFα antagonists.. Sources:
Ozanimod: Sandborn, et al. NEJM 2016; Xeljanz: Sandborn, et al. NEJM 2017; Entyvio: Feagan, et al. NEJM 2013; Humira: Sandborn, et al. Gastroenterology 2012; Remicade: Rutgeerts, et al. NEJM 2005.	October 2020 • 17
TMCS = Total Mayo Clinic Score

Etrasimod Ph2

Demonstrated

Strong Efficacy

Across

Multiple Mayo

Scores and Rapid

Improvement in

4-Domain OASIS1
	24.5%
= 18.7%*
p < 0.004
6.0%
N=54	N=50
Placebo	2 mg

Patients with TMCS ≤ 2 points and

No Subscore > 1 point

3-Domain OASIS1
	31.0%
= 25.6%*
p < 0.001
6.0%
N=54	N=50
Placebo	2 mg

Clinical Remission defined as RB= 0; Endoscopic

Improvement = 0,1; SF= 0,1 (per FDA draft guidance 2016)

Clinical Symptoms

1. Δ=% difference from placebo estimated using Mantel-Haenszel method adjusted with current oral corticosteroid use and prior exposure to TNFα antagonists.
2. = LS mean change from baseline. The 6-point MCS is based on stool frequency and rectal bleeding. Least-squares mean and standard error were estimated using a mixed-effects model with current oral corticosteroid use, prior exposure to anti-TNFα, treatment, week, and treatment-by-week interaction as factors and baseline value as covariate.

6-point MCS (based on SF & RB)2

0.0					Placebo (n=51)
					Etrasimod 2 mg (n=47)
-0.5
-1.0
					p=0.013
-1.5
Baseline 0	1	2	3	4	Sandborn W, et al. Presented at: American Academy of

Study Week

Gastroenterology Annual Meeting; October 8, 2018

October 2020 • 18

Open-Label

Extension of

Phase 2 OASIS

Study

Etrasimod demonstrated sustained clinical activity at Week 46 

75%	Clinical Remission1

93%	Clinical Response1

77%	Endoscopic Improvement1

October 2020 • 19

Source: OLE of OASIS Ph 2, data on file 1. Percentages shown are for patients who received etrasimod 2 mg during the initial study period

Phase 2 Safety Results

Etrasimod was generally safe and well tolerated 

Adverse events were predominantly mild to moderate

No serious adverse events (SAEs) at the 2 mg dose

Impact on HR and AV conduction was low throughout the study with no discontinuations related to bradycardia or AV block. No SAEs related to HR changes or AV block

No cases of sinoatrial arrest

No increases in liver function tests compared to placebo

No reports of macular edema

No reports of abnormal pulmonary function tests

No new safety findings in OLE

No JAK inhibitor-like liabilities

No DDIs

October 2020 • 20

Market Research

Supports

Etrasimod as

Potential Market

Leader in IBD

Oral Market Increasing

(Estimated Future Preference)

68%70%

32%30%

UCCD

	Novel Orals		Biologics

Source: Arena data on file.

Mod/Severe Patients Not Receiving Biologics

UC	64%	18%	18%		Not on Biologics
					Biologic Not in Remission
CD	58%	16%	26%		Biologic In Remission

S1P vs. JAK					Etrasimod vs. Ozanimod
(Estimated Preference)					(Estimated Future Preference)
									81%			83%
64%				56%
36%				44%			19%
						17%
	UC	CD					UC		CD
			S1P		JAK							Etrasimod		Ozanimod

October 2020 • 21

Etrasimod Global Phase 3 Program in UC

	Moderately to Severely Active UC							Endpoints
						52-Week Treatment Period
	52-WeekTreat-Through				Etrasimod, 2 mg		Primary Endpoint
	•	Adults	R				Trial 1: Week 12, week
~370 patients	•	Biologics / JAK inhibitor			Placebo		52 clinical remission
2:1
•	~50% naïve / 50% exposed			(modified MCS)
	12-Week Induction								12-Week Treatment Period	Primary Endpoint
	•	Adults				R				Etrasimod, 2 mg	Trial 2: Week 12
~330 patients	•	Biologics / JAK inhibitor						Placebo	clinical remission
•	~50% naïve / 50% exposed			2:1			(modified MCS)

Open-label Extension Trial

Data

Data

• Patients participated in one of the studies:

― 52-weekTreat-through	Open-Label Extension
― 12-week Induction

October 2020 • 22

Etrasimod Phase 2/3 Program

in Crohn's Disease

1. Program consists of Ph 2 and Ph 3 studies conducted using operationally seamless transition across trials to ensure no stoppage in enrollment activities across global site network

CULTIVATE Ph 2 portion of program includes dose-ranging testing the safety and efficacy of etrasimod 2 mg and 3 mg

Ph 2/3 primary efficacy endpoints are the Crohn's Disease Activity Index (CDAI) and Simple Endoscopic Score for Crohn's Disease (SES-CD) at week 14

Ph 3 will include 2 induction trials with re-randomization of clinical responders into a single maintenance trial

October 2020 • 23

Etrasimod Aims to Address Unmet Need in Eosinophilic Esophagitis (EoE)

Disease Pathology

• Chronic allergen- driven IMID of the esophagus1,2
• Expansion & infiltration of multiple immune cell subsets (dendritic, CD4+, CD8+, eosinophil, mast)
• Th2 cytokine profile (IL- 4/5/13) promotes inflammatory response and tissue damage

Strong Preference for Oral non-steroid Treatment Option

Significant commercial opportunity due to increased prevalence and limited competition

158K US patients prevalence and increasing diagnosis

High unmet need as this is a

chronic lifelong condition

No approved therapies in US

Source: 1. Aria Exp Rev Gastroenterol Hepatol. 2019;13:99-117.; 2. Gonsalves Cli Rev Allergy Immunol 2019;	doi: 10.1007/s12016-019-08732-1
IMID = immune-mediated inflammatory disease	October 2020 • 24

EoE - Multiple Infiltrating Cells Beyond Eosinophils and Mast Cells

Eosinophils

T Cells

CD3

CD8

CD4

Dendritic Cells (DC)	IgE+ B cells	Mast Cells			Healthy		EoE
							Eosinophils	0		62.58
							Total T cells	12.37		83.64
							CD4 T cells	4.61		26.66
							CD8 T cells	11.06		79.84
							B cells	0		2.48
							DC	5.49		8.49
	CD1a		Ig E		Tryptase		Mast cells		2.73		48.26
									Cells (Thousands/mm3)
1- Lucendo et al Am J Surg Pathol. 2001;31:598-606.							October 2020 • 25

Etrasimod Preclinical Evidence Supporting EoE Investigation

Etrasimod mechanism of action may have potential by modulating the trafficking of multiple immune subsets

• Reduce immune cell trafficking (dendritic, T cell, eosinophil)4,5
• Reduce tissue cytokines3, including Th2 cytokines4
• Reduce eosinophil accumulation in tissue4,5

Etrasimod reduced DC trafficking from skin to LN5 and reduced accumulation of eosinophils and activated T cells in skin5

2.0E+4

Langerin+ DC in LN

1.5E+5

Eosinophils in Skin

6.0E+4

Activated T Cells in Skin

(Mean + SEM)

(Mean + SEM)

(Mean + SEM)

1.5E+4

Etrasimod

1.0E+5

Etrasimod

4.0E+4

1.0E+4

ns

ns

*

5.0E+4

**

2.0E+4

Etrasimod

5.0E+3

***

*

**

***

***

0.0E+0

0.0E+0

0.0E+0

Sham Veh	Dex 1 mpk 3 mpk	Sham Veh	Dex 1 mpk 3 mpk	Sham Veh Dex 1 mpk 3 mpk
*p=0.012,	† p=0.0012.	*p<0.05,	† p<0.008, ‡p<0.001. One-Way ANOVA test vs vehicle.
One-Way ANOVA test vs vehicle.

Arena S1P1,5 modulator reduced Th2 cytokines in BAL4

Expect to initiate Ph 2b trial in H2 2020*

100	IL-4
80	(pg/ml)
60			Ovalbumin Treated
40		*		APD588
20				†	‡
0
	Vehicle	Vehicle	12.5	37.5	112.5

120	IL-5	*	Ovalbumin Treated
100	(pg/ml)
			APD588
80
60				†
				‡
40
20
0
	Vehicle	Vehicle	12.5	37.5	112.5

	Data is shown as mean ± SEM. *p<0.001 Vehicle vs. Vehicle/Ova, † p<0.01 vs Vehicle/Ova, ‡p<0.001 vs Vehicle/Ova.
Veh = vehicle, Dex = dexamethasone, mpk = mg/kg
Sources: 1. Aria Exp Rev Gastroenterol Hepatol. 2019;13:99-117.;	2. Gonsalves Cli Rev Allergy Immunol 2019; doi: 10.1007/s12016-019-08732-1.; 3. Al Shamma et al. J Pharmacol
Exp Ther 369:311-317.; 4. Crosby Immunology 2019 poster presentation(mouse asthma model); 5. Crosby ESDR 2019 presentation (mouse dermatitis model)
*Dependent on COVID-19 pandemic	October 2020 • 26

Etrasimod in Dermatologic Conditions

Atopic Dermatitis (AD)

Alopecia Areata (AA)

Etrasimod Aims to Address Unmet Need in Atopic Dermatitis

AD Disease Pathology

• Heterogeneous inflammatory skin disease, clinically characterized by a chronic rash and itch5,6
• Driven by a variety of factors including genetic and environmental factors, a defective skin barrier, and an aberrant immune response5,6
• Recruitment of T cells into the skin and their effector functions, including production of Th2 cytokines, are key in the pathogenesis of AD6,7

18M22M

US patients1

EU patients2

Severe impact	8 Year
On QoL, including	Lifespan
occupational, social	reduction3
3
& psychological

$24B Market Opportunity4

Source: 1. Silverberg, JI. Dermatol Clin. 2017 Jul;35(3):283-289.; 2. Barbarot S, et al. Allergy. 2018 Jun;73(6):1284-1293.;	3. Egeberg A, et al. J Am Acad Dermatol. 2017
Jan;76(1):98-105.; 4. Atopic Dermatitis/Atopic Eczema. Disease Landscape & Forecast. DRG. August 2018.; 5. Bieber T. NEJM 2008, 358;14: 1483-1494; 6: Guttman-Yassky et al.
JACI 2011; 127(6):1420-14317:Renert-Yuval Y and Guttman-Yassky E. AAAI 2020, 124:28-35	October 2020 • 28

Etrasimod Preclinical Evidence Supporting AD Investigation

Etrasimod Potential: systemic reduction of dendritic cell and T cell trafficking may lead to improved skin inflammation

Etrasimod

Potential

Dendritic Cell

Etrasimod

Potential

Scientific Rationale

• Reduced inflammation & decrease skin- infiltrating T cells, B cells and eosinophils1,2
• Reduced trafficking of dendritic cells1
• Reduced Th2 profile in asthma animal model2
• Reduced collagen deposition & dermal thickening3
• S1P receptor modulator mediated efficacy demonstrated in other dermatologic diseases (e.g. psoriasis)
• Etrasimod demonstrated early clinical result in PG & EIM
• Potential safety and efficacy profile appropriate to dermatologic conditions

Source: 1. Crosby et al. FITC induced contact-hypersensitivity dermatitis model, ESDR 2019 Bordeaux, France 2. Crosby et al. S1P1 modulator mouse asthma model AAI 2019,
San Diego, CA 3. Arena data on file, Bleomycin-induced skin fibrosis model	October 2020 • 29

Etrasimod Early Clinical Result in Dermatologic Conditions

Baseline Image Initial Measurement (7/5/17)

Initial Area	4.668 CmSq
Current Area	1.520 CmSq
Image Date of Assessment (9/27/17)
Percent Area Change	-67.44%
Length	2.18cm

October 2020 • 30

Etrasimod Ph 2b

Trial Evaluating

Atopic Dermatitis

Primary Endpoint

• Percent change in Eczema Area and Severity Index (EASI) from baseline to week 12

Study Detail

• Male and female patients 18-70 years of age
• EASI ≥ 12 at screening (≥ 16 at baseline); Validated Investigator Global Assessment (vIGA)
  ≥ 3, Body Surface Area ≥ 10% involvement
• ~140 patients in sites across the US, CAN & AUS

A Phase 2b Placebo-Controlled, Dose Finding Trial to Assess the Safety and Efficacy of Etrasimod in Patients with Moderate-to-Severe AD

Study Schematic

	DAY 1		WEEK 12	WEEK 16
	Screening	12-Week		Follow-up
	Period	Treatment Period		Period
	<4 Weeks
	Etrasimod 1 mg		4-Week
	Baseline			Follow-up visit
	EASI		Etrasimod 2 mg
	R
				Placebo

October 2020 • 31

Etrasimod Aims to Address Unmet Need in Alopecia Areata

Alopecia Areata (AA)

• Common T cell-mediated autoimmune disease1,2
• Disease can range from patchy hair loss to total hair loss of scalp, face, and body1,2
• Associated with several serious debilitating comorbidities, including other autoimmune diseases3,4
• Psychosocial stress associated with this form of hair loss is significant, and results in a clear reduction in QoL1-3

There are no approved therapies specifically for AA

• SOC is injected corticosteroids, lacks efficacy and is only feasible for small treatment areas
• Off-labelJAK use is minimal, safety concerns

2.9M2.2M

US patients5

EU patients5

Severe impact	No
On QoL and sense of	Approved
well-being resulting in	Therapies
social phobia, anxiety
and depression	Specific for AA

Sources: 1. Gilhar et al. NEJM 2012; 366:1515-25 2. Harvard Medical School.Alopecia Areata. Published: 01/2019; 3. Lee S., Lee H, et al.Comorbidities in alopecia areata: A systematic review andmeta-analysis. J Am Acad Dermatol. 2019;80:466-77. 4. Miller et al 2015 JIDSP, 17(2):61-62. 5. DRG AA Disease Landscape & Forecast Aug 2019 US diagnosed prevalence Zerbinati 2017; UptoDate: https://www.uptodate.com/contents/alopecia-areata-beyond-the-basics

October 2020 • 32

Alopecia Areata Disease Pathogenesis

Disease Pathology

Etrasimod

Potential:

Reduce inflammation to restore normal hair growth cycle

Alopecia Areata1,2

• Caused by a collapse in immune privilege in hair follicle bulb
• CD4+ and CD8+ T cells infiltrate the hair bulb during anagen phase of the hair growth cycle-"like a swarm of bees"
• Inflammation alters normal hair growth cycle and causes hair to fall out
• However, hair follicle structure and stem cells are preserved, suggesting potential for hair regrowth

1. Gilhar et al. NEJM 2012; 366:1515-25 2. Pratt et al. NRDP 2017; 3:17011

October 2020 • 33

Etrasimod Preclinical Evidence Supporting AA Investigation

Etrasimod Hypothesis

• Reduce number circulating CD4+ and CD8+ lymphocytes2 available to infiltrate hair follicle
• Fewer CD4+ and CD8+ T cells in the tissue3 may decrease inflammation and restore normal hair growth

Preliminary data4: Immune cells in the inflammatory infiltrate around lesional follicles in AA patients are positive for S1P1

Healthy

AA Patient

Etrasimod reduced both CD4+ and CD8+ T cells in the ear skin3 (prophylactic dermatitis model)

Ear CD4+ T cells

Ear CD8+ T cells

200 % of vehicle control

150

100

50

0

250 % of vehicle control

200

150

100

50

0

• Sham
• Vehicle
• JAKi 10 mg/kg BID
• Etrasimod 1mg/kg QD
• Etrasimod 3mg/kg QD

*p=.02, ****p<0.0001

One Way ANOVA with Tukey's Multiple Comparison Test

"Swarm of

Bees" immune

cell (IC) infiltrate

****

*

****

****

****

around hair bulb

are S1P1+

Blue: DAPI (cell nuclei), Green: S1P1

Is/Be: Isthmus/Bulge, Sbu: Suprabulbar area, Bu: Bulb, IC: Immune Cell	October 2020 • 34
Sources: 1. Gilhar et al. NEJM 2012; 366:1515-25 2. Peyrin-Biroulet et al. ECCO 2018, Vienna, Austria 3. Arena data on file (mouse dermatitis model), 4. Arena data on
file, generated in collaboration with Monasterium Lab, PI Marta Bertolini

Etrasimod Ph 2a

Trial Evaluating

Alopecia Areata

Primary Endpoint

• Percent change in Severity of Alopecia Tool I (SALT I) score from baseline to week 24

Study Detail

• Male and female patients 18-70 years of age
• SALT I score of ≥ 50 at screening; Current episode of hair loss for ≥ 6 months but < 8 years
• Enrolling 36 patients in sites across the US and
  CAN

A Phase 2a Placebo-Controlled Trial to Assess the Safety and Efficacy of Once-Daily Etrasimod 2 mg in Patients with Moderate-to-Severe AA

Study Schematic

	DAY 1	WEEK 24	WEEK 52
Screening	Randomized	Open-Label	Follow-up
Period	Treatment Period	Extension	Period

Baseline	R			Etrasimod 2 mg	4-Week
SALT ≥50				Follow-up period
			Placebo		Etrasimod 2 mg

Ph 2a

Topline Data

Analysis

October 2020 • 35

Olorinab

Investigational Peripherally Acting, Highly- Selective, Full-Agonist to Cannabinoid Receptor 2 (CB2) for Gastrointestinal Pain

Olorinab Aims to Address an Unmet Need for Abdominal Pain

Significant Unmet Opportunity for a Targeted IBS Pain Treatment

27M

IBS patients (US)1

78%

>70%

<30%

78% of IBS patients report	>70% of HCP visits are driven	<30% patients are very satisfied
recurring / continuous	by abdominal pain3	with their IBS prescription
abdominal pain2		medication3

Olorinab Rationale

• Orally administered, peripherally acting analgesic
• Observed to be 1,000x more selective for CB2 than CB1
• Peripherally acting / designed to be devoid of psychoactive affects and abuse liability
• Full agonism and lack of tachyphylaxis may translate into sustained antinociceptive effects

Sources: 1. DRG: IBS Report (2015); 2. Drossman DA, et al. J Clin Gastroenterol. 2009 Jul; 43(6): 541-550.; 3. AGA Patient Survey, IBS In America, December 2015.

October 2020 • 37

Shared Mechanisms in IBS and IBD Pain

• IBS symptoms reported in 36% UC and

46% CD patients in apparent	CB2 receptor
remission1,4

• Submucosal microinflammation, persisting changes in the lumen and epithelium undetected by conventional testing4,5
• Increased CB2 receptor expression on

colonic mucosa in patients with IBS2,3

• CB2 receptor activation on sensory afferent pain fibers in the colon may

reduce visceral hypersensitivity underlying IBS

Sources: 1. Barbara et al., (2014) Curr Opin Gastroenterol 30:352-358; 2. Cremon et al., (2017) Alimentary Pharmacology and Therapeutics 45:909-922;	3. Dr. Lin Chang, unpublished
data; 4. Spiller and Major (2016), Nat Rev Gastroenterol Hepatol 13(10):613-21; 5. Vivinus-Nebot et al., (2013) Gut 63:744-752	October 2020 • 38

Olorinab Reduced Firing Rate of Colonic Pain Fibers in IBD and IBS-like models

In Vitro Analysis Performed Using Single-unit Extracellular Recordings From Mouse Splanchnic Colonic Nerves1

	Healthy Colons											IBD-Like Colons												IBS-Like Colons
Faster	25		 Mechanosensory	 Health animals		25		 Mechanosensory Response	*P<0.05		25		 Mechanosensory Response	*P<0.05
Firing Rate					Response				+ vehicle					(spikes/sec)							† P<0.01					(spikes/sec)							† P<0.01
20				(spikes/sec)				 Olorinab-treated		20													‡P<0.001		20													‡P<0.001
	15											animals		15							*	†	‡		15							*	†	‡
	10																		10								10
	5																		5																		5
Slower	0																		0																		0
Firing Rate	0	10	100	1000 10000			0	10	100	1000	10000			0	10	100	1000	10000
						Olorinab Concentration (nM)						Olorinab Concentration (nM)						Olorinab Concentration (nM)

Olorinab treatment had no effect on healthy nociceptors showing specificity of response in disease states

1. Castro J, et al. Poster presented at: Digestive Disease Week; May 18-21, 2019; San Diego, CA. 2. Lindstrom B, et al. Poster presented at: 2019 Crohn's & Colitis Congress;	October 2020 • 39
February 7-9, 2019; Las Vegas, NV.

Strong Signal in Average Abdominal Pain Score (AAPS) and Responder Analysis in Ph 2a

AAPS from Baseline		25 mg		100 mg	Average Peak Pain Responders

4 week

*

**

Peak

8 week

**

**

4 week

*

Trough

8 week

*

*

Evening

4 week

*

Trough

8 week

*

**

0

-1

-2

-3

-4

-5

-

AAPS Improvement -4.6

100%

80%

60%

40%

20%

0%

Week 4 Week 8	Week 4 Week 8	Week 4 Week 8
25 mg	100 mg	All Patients

85% of patients improved at week 4

100% of patients improved at week 8

*=p<0.05; **=p<0.01

(Evaluable Population with ≥30% change from baseline in AAPS)

Source: Arena Ph 2a trial in CD. Data on file

October 2020 • 40

Olorinab Ph 2 Trial

Evaluating Abdominal

Pain in IBS

Primary Endpoint

• Improvement in the weekly Average Abdominal Pain Scale (AAPS) from baseline to week 12

Study Detail

• Male and female patients 18-70 years of age
• Clinical diagnosis of IBS-C or IBS-D
• Enrolling ~240 patients in sites across the US

A Phase 2, Placebo-ControlledParallel-Group Study to Evaluate the Safety, Tolerability, and Efficacy of Olorinab in Patients with Irritable Bowel Syndrome (IBS) Experiencing Abdominal Pain

Study Schematic

	DAY 1	WEEK 12	WEEK 14
Screening	12-Week	Follow-up
Period	Treatment Period	Period
<2 Weeks			Olorinab 10 mg	2-Week
Baseline			Follow-up visit
		Olorinab 25 mg
AAPS
R				Olorinab 50 mg
				Placebo

October 2020 • 41

APD418

Potential First-in-Class Investigational Beta-3 AdrR Antagonist and Cardiac Myotrope for Acute Heart Failure (AHF)

Significant Unmet Need in AHF

Long-Awaited Innovative Approach to AHF

9.5M AHF hospitalizations in 20251

70% readmitted within 1 year2

 20% increased mortality

with each rehospitalization1

No approved treatments proven to improve outcomes3

Known Issues with

Inotropes

No improvement in outcomes

Increased risk of mortality

Decreased efficacy (Dobutamine)

Hypotension / arrhythmia liabilities

1. Inotropes typically used in low blood pressure AHF patients

Short-term survival among patients hospitalized with HF

Global ALARM-HF registry (propensity scoring methods)

Sources: 1. Heart Failure. Disease Landscape & Forecast. DRG. June 2018.;	2. Dharmarajan K, et al. BMJ. 2015 Feb 5;350:h411.; 3. Nielsen DV, et al. Anesthesiology. 2014
May;120(5):1098-108.	October 2020 • 43

APD418 First-in-Class for AHF with Novel MOA -

Improved Cardiac Function Without Hemodynamic Liability

Decompensated Cardiac Myocyte

Increased Cardiac Performance & Safety

Results are compiled from 3 studies (n = 7 dogs/study)

30-min APD418 i.v. infusion

60-min APD418 i.v. infusion

6-hr APD418 i.v. infusion

Heart Rate

20

			Ejection Fraction	*
	10			*	*
(%)			*
Change	0
	-10
	-20	0.35	0.70	1.4	2.8	5.6

i.v. APD418 mg/kg/hr

	20
	10
(%)
Change	0
	-10
	-20

Mean Aortic Pressure

Ejection Fraction	*
*
*
*

#

0.35 0.70 1.4 2.8 5.6

i.v. APD418 mg/kg/hr

❖ Myocardial oxygen demand (MVO2) did not change at any dose tested

* P<0.05 vs Vehicle for EF; # P<0.05 vs Vehicle for MAP

October 2020 • 44

Image adapted from: Kulandavelu S and Hare JM. J Am Coll Cardiol. 2012;59(22):1988-1990; Moniotte S, et al. Circulation. 2001 Mar 27;103(12):1649-55.

APD418 and Cimlanod	Note:
when comparing data across clinical studies
	No direct head-to-head data available - Caution advised

APD418 - Investigational β3-Adrenergic

Cimlanod - Nitroxyl (HNO) donor1,2

receptor antagonist	VS
			• Increased cardiac contractility without				•	HNO MoA drives inotropic, lusitropic
			altering cytosolic Ca2+ levels					and vasodilatory effects
								― Increases efficiency of Ca2+ cycling in
			• Selective upregulation of β3-AdrR					cardiomyocytes and improves myofilament
	Ph 1 ready, i.v.	Ph 2 Pro-Drug,	sensitivity to Ca2+
	expression level in failing hearts
	― Smooth muscle cell sGC activation results
	formulation	resulted in targeted cardiac myocyte	i.v. formulation
	in vasodilation
			therapy
							• No increase in MVO2 demand or
			• No increase in MVO2 demand or cTnI					cTnI levels
			levels observed in preclinical studies				• Broad non-cardiac targeted approach
								results in decreased BP
	Discovered by	• At potentially therapeutic doses, no		Discovered by
	Arena, full	significant effect was observed on		Cardioxyl
rights retained	hemodynamic parameters such as HR	Pharmaceuticals	Bristol-Myers bets $2B on
and BP in animal models
							Cardioxyl's heart failure therapy"

Sources: 1. Tita C et al. A phase 2a dose-escalation study of the safety, tolerability, pharmacokinetics and hemodynamic effects of BMS-986231 in hospitalized patients with heart

failure with reduced ejection fraction. Eur J Heart Fail 2017; 19:1321-1332.;	2. Felker M et al. Rationale and design for the development of a novel nitroxyl donor in patients with acute
heart failure. Eur J Heart Fail 2019; 21:1022-1031.	October 2020 • 45

Deep Pipeline with Therapeutic Focus

Pipeline of Potential First-in-Class and Best-in-Disease Assets

INTERNAL PROGRAMS:		EARLY RESEARCH	PRE-CLINICAL	PHASE 1	PHASE 2	PHASE 3
Etrasimod	GI	ELEVATE UC 52	Ph 3
		ELEVATE UC 12	Ph 3
		Crohn's Disease (CD)	Ph 2 / 3
		Eosinophilic Esophagitis (EoE)	Ph 2b Planning
	Derm	ADVISE (Atopic Dermatitis)	Ph 2b
		Alopecia Areata (AA)	Ph 2
	CR	Controlled Release	Life Cycle Management
Olorinab	GI	Pain with IBS	Ph 2b
		Pain with IBD	Ph 2b Planning
APD418	CV	Acute (AHF)	Ph 1
LICENSED OR PARTNERED:
Ralinepag	UTHR	PAH	Ph 3
EARLIER STAGE INTERNAL PLATFORMS:
Project Cabrillo -		Target 1
Early Stage Immune &	Target 2
Inflammatory Platform w/ Beacon	Additional Targets
Arena Neuroscience Platform -	AN352	Ph 1
Microglial Neuroinflammation Targets	AN143
		AN659
		Other
							October 2020 • 46

Nasdaq: ARNA