Exhibit 10.38

ASSET PURCHASE AGREEMENT

dated as of December 18, 2007

by and between

Siegfried Ltd.
(as "Seller")
and

Arena Pharmaceuticals GmbH
(as "Buyer")

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TABLE OF CONTENTS

|          |  |                                                 |  | Page
|--------- |  | ----------------------------------------------- |  | ----
|ARTICLE 1 |  | DEFINITIONS                                     |  | 1   
|1.1       |  | Definitions                                     |  | 1   
|1.2       |  | Construction                                    |  | 1   
|ARTICLE 2 |  | PURCHASE AND SALE                               |  | 1   
|2.1       |  | Purchase and Sale of Assets                     |  | 1   
|2.2       |  | Liabilities                                     |  | 2   
|2.3       |  | Business of Seller                              |  | 2   
|2.4       |  | Risk and Benefit                                |  | 2   
|ARTICLE 3 |  | PURCHASE PRICE                                  |  | 2   
|3.1       |  | Purchase Price                                  |  | 2   
|3.2       |  | Purchase Price Payment                          |  | 3   
|3.3       |  | Value Added Tax                                 |  | 3   
|ARTICLE 4 |  | CLOSING AND CLOSING DELIVERIES                  |  | 3   
|4.1       |  | Closing                                         |  | 3   
|4.2       |  | Conditions Precedent to Closing                 |  | 3   
|4.3       |  | Closing Deliveries                              |  | 4   
|ARTICLE 5 |  | REPRESENTATIONS AND WARRANTIES                  |  | 5   
|5.1       |  | Organization and Qualification                  |  | 5   
|5.2       |  | Seller's Representations and Warranties         |  | 5   
|5.3       |  | Litigation                                      |  | 5   
|5.4       |  | Transferred Employees                           |  | 6   
|5.5       |  | Social Security                                 |  | 6   
|5.6       |  | Insurance                                       |  | 7   
|5.7       |  | Registrations                                   |  | 7   
|5.7A      |  | Additional Toll Manufacturing Representations   |  | 7   
|5.8       |  | Technical Equipment and Other Personal Property |  | 7   
|5.9       |  | Real Property                                   |  | 8   
|5.9A      |  | Retained Units                                  |  | 9   
|5.9B      |  | Building 120                                    |  | 9   
|5.10      |  | Ancillary Assets                                |  | 10  
|5.11      |  | Compliance                                      |  | 10  
|5.12      |  | Consents                                        |  | 10  

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|5.13      |  | Contravention                                                                     |  | 10
|--------- |  | --------------------------------------------------------------------------------- |  | --
|5.14      |  | Absence of Material Adverse Change                                                |  | 10
|5.15      |  | Full Disclosure                                                                   |  | 10
|5.16      |  | Confirmation of the Buyer                                                         |  | 10
|5.17      |  | Capital Increase by Transfer of Assets (Sachübernahmekapitalerhöhung)             |  | 11
|ARTICLE 6 |  | COVENANTS AND AGREEMENTS                                                          |  | 11
|6.1       |  | Books and Records; Cooperation                                                    |  | 11
|6.2       |  | Transferred Employees                                                             |  | 11
|6.3       |  | Further Assurances                                                                |  | 14
|6.4       |  | Real Property Deed                                                                |  | 14
|6.5       |  | Technical Services Agreement                                                      |  | 14
|6.6       |  | API Manufacturing Agreement                                                       |  | 14
|6.7       |  | Toll Manufacturing Agreement                                                      |  | 14
|6.8       |  | Quality Agreement                                                                 |  | 14
|6.9       |  | [Intentionally deleted]                                                           |  | 14
|6.10      |  | Undertaking and Agreement in relation to the Use and Operation of Acquired Assets |  | 14
|6.11      |  | Maintenance and Capital Investments                                               |  | 14
|6.12      |  | Insurance                                                                         |  | 15
|6.13      |  | Environmental                                                                     |  | 15
|6.14      |  | Right of First Refusal of Buyer for Retained Units                                |  | 15
|6.15      |  | Right of First Refusal of Seller for Real Property                                |  | 16
|6.15A     |  | Sale and Leaseback                                                                |  | 17
|6.16      |  | Purchase Option of Buyer for Retained Units                                       |  | 17
|6.17      |  | Sale Option of Seller for Retained Units                                          |  | 18
|6.18      |  | Purchase Option of Buyer re Building 120                                          |  | 18
|6.19      |  | Seller' Right to Buy Back the Real Property                                       |  | 19
|6.20      |  | Community of Co-Owners ("Stockwerkeigentümergemeinschaft")                        |  | 19
|6.21      |  | Lock-in for Share Consideration                                                   |  | 19
|6.22      |  | Reference to DMF                                                                  |  | 20
|6.23      |  | Additional Assets                                                                 |  | 20
|6.24      |  | Cantonal Production Approval                                                      |  | 20
|6.25      |  | Service and Maintenance Agreements, Lease Agreements for Copiers                  |  | 20
|6.26      |  | Financial Statements                                                              |  | 20

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|6.27      |  | Roof; Warranties                                                                |  | 20
|--------- |  | ------------------------------------------------------------------------------- |  | --
|6.28      |  | Cost relating to addressing conditions identified by internal quality audits    |  | 21
|6.29      |  | Land Registry Registration                                                      |  | 21
|ARTICLE 7 |  | INDEMNITY                                                                       |  | 21
|7.1       |  | Indemnification by Seller and Indemnification by Buyer                          |  | 21
|7.2       |  | Response to Indemnity Claim                                                     |  | 21
|7.3       |  | Threshold Level                                                                 |  | 22
|7.4       |  | Indemnification Cap                                                             |  | 22
|7.5       |  | Indemnity Offset                                                                |  | 22
|7.6       |  | Time Limitations                                                                |  | 22
|ARTICLE 8 |  | MISCELLANEOUS                                                                   |  | 22
|8.1       |  | Assignment                                                                      |  | 22
|8.2       |  | Expenses                                                                        |  | 22
|8.3       |  | Confidentiality                                                                 |  | 22
|8.4       |  | Public Announcement Pertaining to this Agreement and the Transaction Agreements |  | 23
|8.5       |  | Severability                                                                    |  | 23
|8.6       |  | Amendment                                                                       |  | 23
|8.7       |  | Waiver                                                                          |  | 23
|8.8       |  | Governing Law                                                                   |  | 23
|8.9       |  | Term of this Agreement                                                          |  | 23
|8.10      |  | Arbitration; Venue                                                              |  | 23
|8.11      |  | Counterparts; Language                                                          |  | 23
|8.12      |  | Notices                                                                         |  | 23

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SCHEDULES:

|1.1  |          | Definitions                                                                                               |  | 
|---- | -------- | --------------------------------------------------------------------------------------------------------- |  | 
|2.1  | (a)      | Real Property Documentation                                                                               |  | 
|2.1  | (b)      | Technical Equipment and Other Personal Property                                                           |  | 
|2.1  | (c)      | Ancillary Assets                                                                                          |  | 
|3.2  |          | Bank Account of Seller                                                                                    |  | 
|4.2  | (a)(i)   | Swissmedic license for Buyer to manufacture and sell the Products at the Real Property                    |  | 
|4.2  | (a)(ii)  | Cantonal Operating Approval, dated 16 July 2007                                                           |  | 
|4.2  | (f)      | Key Transferred Employees                                                                                 |  | 
|4.3  | (b)(v)   | Form of Share Consideration                                                                               |  | 
|5.2  |          | Buyer's Persons whose actual knowledge is relevant                                                        |  | 
|5.3  |          | List of litigations                                                                                       |  | 
|5.4  |          | Employees that threatened to tender or tendered their resignation                                         |  | 
|5.6  |          | List of currently effective insurance policies                                                            |  | 
|5.7  |          | List of licenses, permits and authorizations                                                              |  | 
|5.8  | (d)      | Capital expenditure program                                                                               |  | 
|5.9  | (g)(i)   | Seller's Persons whose actual knowledge is relevant                                                       |  | 
|5.9  | (g)(ii)  | Modifications to the Real Property                                                                        |  | 
|5.12 |          | Consents                                                                                                  |  | 
|5.14 |          | Material Adverse Change                                                                                   |  | 
|6.2  | (a)(i)   | Transferred Employees: employees list and reference to basic terms                                        |  | 
|6.2  | (a)(ii)  | Transferred Employees: reference to salary deductions, allowances and benefits                            |  | 
|6.2  | (a)(iii) | Transferred Employees: reference to accrued overtime, vacation, seniority gifts and leave gifts           |  | 
|6.2  | (b)      | Seller's Employment Terms                                                                                 |  | 
|6.2  | (c)      | Compensation for bonus, accrued holiday, overtime and other similar entitlements of Transferred Employees |  | 
|6.11 | (b)      | Capital Expenditure Program 2008                                                                          |  | 
|6.12 |          | Insurances and allocation of premiums                                                                     |  | 
|6.15 | (b)      | Technical Equipment and Other Personal Property that is subject to Seller's right of first refusal        |  | 
|6.25 |          | Service and Maintenance Agreements and Lease Agreements for Copiers                                       |  | 

EXHIBITS:

|6.2 | (a) | Employment Transfer Letter Agreement |  | 
|--- | --- | ------------------------------------ |  | 
|6.4 |     | Real Property Deed                   |  | 
|6.5 |     | Technical Services Agreement         |  | 
|6.6 |     | API Manufacturing Agreement          |  | 
|6.7 |     | Toll Manufacturing Agreement         |  | 
|6.8 |     | Quality Agreement                    |  | 

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT(this "Agreement"), dated as of
December 18, 2007 (the "Effective Date"), is entered into by and between Siegfried Ltd., a company organized under the laws of Switzerland with
registered office at Untere Brühlstrasse 4, 4800 Zofingen, Switzerland ("Seller"), and Arena Pharmaceuticals GmbH, a
company organized under the laws of Switzerland with its registered office at c/o Siegfried Holding AG, Untere Brühlstrasse 4, 4800 Zofingen, Switzerland
("Buyer"). Seller and Buyer sometimes are referred to herein collectively as the "Parties" and
individually as a "Party".

W I T N E S S E T H

WHEREAS, Buyer is an affiliate of Arena Pharmaceuticals, Inc., a company organized under the laws of Delaware,
USA, and listed on the Nasdaq Global Market ("Arena"), and Seller is an affiliate of Siegfried Holding Ltd., a company organized under the laws of
Switzerland and listed on the Swiss stock exchange ("Siegfried Holding");

WHEREAS, Buyer has needs for a manufacturing facility in order to manufacture Arena products;

WHEREAS, Seller has a suitable manufacturing facility available for Buyer;

WHEREAS, Seller desires to sell, transfer, convey, assign and deliver, and Buyer desires to purchase, acquire and accept the Acquired
Assets upon the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE,the Parties agree as follows:

ARTICLE 1
DEFINITIONS

1.1Definitions.    In addition to the terms defined above and other terms defined in other
Articles of this Agreement, the terms set forth inSchedule 1.1shall have the meanings specified or referred to in such Schedule and
shall be equally applicable to both the singular and plural forms.

1.2Construction.    The language in all parts of this Agreement shall be construed, in all
cases, according to its fair meaning. "Days" or "days" means calendar days unless otherwise specified. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this Agreement as a whole (including any Schedules hereto) and not to any particular provision of this Agreement, and all Article,
Schedule and Exhibit references are to this Agreement unless otherwise specified.

ARTICLE 2
PURCHASE AND SALE

2.1Purchase and Sale of Assets.    Seller hereby undertakes, subject to the terms of this
Agreement, to sell, transfer, assign, convey and deliver to Buyer, and Buyer hereby undertakes, subject to the terms of this Agreement, to purchase, acquire and accept from Seller, on the Closing, on
the terms herein provided, all right, title and interest in and to the following assets (the "Acquired Assets"):



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As
a matter of clarification, the Parties acknowledge (i) that Buyer is purchasing only the Acquired Assets, and (ii) that Seller will continue to conduct substantial
business at its current site, and (iii) that Seller will continue to employ many employees for conducting its business, and (iv) that Seller will continue to have a substantial customer
base.

Furthermore,
the Parties agree that the sale and purchase of the Acquired Assets under this Agreement shall not be a transfer of assets and liabilities in the sense of art. 69 et seq. of
the Swiss Merger Law ("Fusionsgesetz"), and shall not be a transfer of a business, whether in the sense of art. 181 CO or otherwise, and that no
liabilities of whatsoever nature whether related to the Acquired Assets or to the Business or otherwise shall or will be assigned or transferred from Seller to Buyer and assumed by Buyer unless
otherwise specifically so agreed in this Agreement and, in particular, inArticle 2.2.

2.2Liabilities.



2.3Business of Seller.    Seller has used the Real Property and the Transferred Employees
in the past for the purpose of conducting a manufacturing business to make and sell various generic pharmaceutical products, including the Products (the
"Business"). Buyer is not purchasing the Business or assuming any liabilities of the Business, unless otherwise specifically so agreed in this Agreement
and, in particular, inArticle 2.2.

2.4Risk and Benefit.    Risk and benefit shall only pass at the Closing.

ARTICLE 3
PURCHASE PRICE

3.1Purchase Price.    The aggregate purchase price (the "Purchase
Price") to be paid by Buyer to Seller for the Acquired Assets consists of (i) cash consideration in the amount of CHF 31,821,512 (Swiss Francs thirty one million
eight hundred and twenty one thousand five hundred and twelve), (the "Cash Consideration") and of (ii) 1,488,482 shares of Arena common stock
(NASDAQ ticker ARNA) (the "Share Consideration").

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3.2Purchase Price Payment.    CHF 21,821,512 of the Cash Consideration shall be
paid by Buyer to Seller into Seller's bank accounts set forth onSchedule 3.2on the Closing Date. The remainder of the Cash Consideration shall
be paid in three equal installments, the first to be paid on the third anniversary of the Closing Date, the second on the fourth anniversary of the Closing Date, and the third on the fifth anniversary
of the Closing Date, each time into the bank account to be designated by Seller. The Share Consideration shall be transferred by Buyer to Seller at Closing by issuance and delivery of a stock
certificate evidencing the Share Consideration, subject to the provisions ofArticle 6.21.

3.3Value Added Tax.



ARTICLE 4
CLOSING AND CLOSING DELIVERIES

4.1Closing.    The transactions contemplated by this Agreement shall be consummated at a
closing (the "Closing") which shall be held at the offices of Seller no later than on January 9, 2008 upon the closing conditions pursuant to Article 4.2having been satisfied or waived (the "Closing Date"), unless otherwise agreed in
writing by the Parties. The Parties agree that the Closing shall have prorations as per January 1, 2008. The proration set forth in this Article 4.1 shall also have effect on any regular
ordinary course of business operating income and expenses, whether actual or accrued, relating to the Acquired Assets and the Transferred Employees, meaning that any reference to Closing as the moment
relevant for bearing of or settling expenses (whether actual or accrued) or for earning or settling income (whether actual or accrued), shall be construed as referring to January 1, 2008.

4.2Conditions Precedent to Closing.    Each Party shall be entitled to refuse Closing for
as long as any of the following conditions has not been met or waived as being a condition precedent to Closing, provided that such condition is legally waivable:



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Prior
to Seller filing the application referred to in letter (b), Buyer and Seller shall provide each other with a written confirmation that, subject to the provision of the written confirmation of
the entry referred to in letter (b) above and subject to the actual delivery of the items referenced in Section 4.2(b) and (c) above, the other conditions precedent have been met to their satisfaction
or are waived.

4.3Closing Deliveries.



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ARTICLE 5
REPRESENTATIONS AND WARRANTIES

5.1Organization and Qualification.    Seller on the one hand and Buyer on the other hand
represent and warrant to each other that as of the time of signing of this Agreement and as of the Closing Date:



5.2Seller's Representations and Warranties.    Except as herein stated in
Articles 5.3 through 5.15, Seller makes no representations and gives no warranties in respect of the Acquired Assets. The representations and warranties given in Articles 5.3 through
5.15 herein shall only be restricted or qualified by (1) the information contained in this Agreement (including its Schedules and Exhibits) and (2) by the actual knowledge of at least
one of Buyer's employees listed inSchedule 5.2(meaning such persons' actual knowledge (whereby it is understood that such persons have no duty
of independent verification)) of the facts which are contrary to Seller's representation and such person's actual knowledge that such contrary facts adversely affect the Acquired Assets, but this
subpart (2) is not applicable if at least one of the Persons listed inSchedule 5.9(g)(i)had actual knowledge of such facts (whereby it
is understood that such persons have no duty of independent verification). Art. 200 CO is hereby excluded and waived.

Seller
represents and warrants to the Buyer for a period of eighteen months from the Closing Date (or such longer time period as otherwise indicated herein), as of the time of signing of
this Agreement and as of the Closing (except where otherwise indicated) the following as set forth inArticles 5.3through 5.15.

5.3Litigation.    Except as set forth in Schedule 5.3, there is no litigation or arbitration, administrative
proceedings, governmental inquiries or investigations pending or, to the
knowledge of

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Seller,
threatened, relating to the Acquired Assets, and/or the Transferred Employees. Such matters listed onSchedule 5.3are not material to
Seller, the Acquired Assets or the Transferred Employees.

5.4Transferred Employees.    As of the Effective Date, none of the Transferred Employees
hereto has tendered or, to the knowledge of Seller, threatened his/her resignation, except as set forth inSchedule 5.4. The employment
agreements of the Transferred Employees are valid and in full force and effect as of the Closing Date in all material respects. As of the Effective Date and as of the Closing Date, respectively,
Seller has not given notice of termination of any such agreement, except for valid reasons in accordance with article 337 CO. Overall, the Transferred Employees materially have the level of experience
and skills and the working capacity to do all of the manufacturing of the Products as contemplated by the Toll Manufacturing Agreement.

No
employees other than the Actual Transferred Employees shall be transferred to or otherwise become employees of the Buyer as a result of this Agreement without Buyer's explicit written
consent.

The
documents referred to in Schedule 6.2(a)(i), Schedule 6.2(a)(ii), and Schedule 6.2(a)(iii), copies of which were handed over by Seller to Buyer's Swiss counsel
at signing on the Effective Date, contain complete and accurate information relating to the Transferred Employees as of the Effective Date for
the following subjects matters and such information will not in any respect be modified or changed between the Effective Date and the Closing Date (except for those items in (iii) below):



The
employment agreements of the Transferred employees do not contain any material terms and conditions, which are not set forth in the documents referred to above and in Seller's
Employment Terms. The information referred to under (ii) above has been set up according to and is in line with the rules applicable to the items mentioned under (ii), and such rules have not
changed up and until the Closing Date. There are no company loans outstanding. The information referred to under (iii) above is a complete list of overtime, vacation and similar entitlements
accrued by the Transferred Employees up to two days prior to the Effective Date.

5.5Social Security.    All Transferred Employees are insured according to Swiss labor laws
and are beneficiaries of requisite pension funds. All social security returns, reports and forms relating to Transferred Employees required to be filed in accordance with all applicable laws have been
prepared and filed in the manner required by applicable law, are true, correct and complete in all material respects, and reflect in all material respects the liability for social security for the
relevant terms. All social security contributions (including payments to pension funds) relating to Transferred Employees and to any period prior to Closing have been paid in due course or shall be
paid when due. There are

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no
audits, investigations or reassessments relating to social security pending or, to the knowledge of Seller, threatened, with respect to the Transferred Employees. This representation and warranty
shall survive and be valid and enforceable for a period exceeding the 18 months from the Closing Date as set forth inArticle 5.2and until
expiry of the relevant statute of limitation for any rights or claims to be made which result in a breach of this representation and warranty.

5.6Insurance.    The Acquired Assets, and in particular the Real Property, are covered by
currently effective insurance policies, as listed inSchedule 5.6, with insurance companies in such minimum types and amounts as are consistent
with customary practices applicable in Switzerland for pharmaceutical manufacturing. Insurance policies held by and previously disclosed to Buyer by Seller are in full force and effect. As of Closing,
Seller is not in material default under any of them nor, to the knowledge of Seller, has any insurer threatened to, or indicated that it would, terminate any of these policies. As of Closing, no
claims exist under any insurance policy in relation to the Acquired Assets.

5.7Registrations.    Seller possesses all those Governmental Approvals, licenses, permits
and authorizations necessary for the manufacture and sale of the Products as currently produced and as contemplated in the Toll Manufacturing Agreement. All such licenses, permits and authorizations
are listed inSchedule 5.7. It is understood that marketing authorizations for local markets are held by the local distributors. Up to and until
the Closing Date, the Real Property was part of an FDA approved facility under a valid cGMP Certificate.

5.7AAdditional Toll Manufacturing Representations.    (a) Immediately prior to the
Effective Date, Seller holds all requisite material licenses, authorizations and approvals required by federal, state or local governmental authorities to manufacture the Products. (b) The Acquired
Assets and Transferred Employees provided by Seller to Buyer under this Agreement are sufficient to manufacture the Products according to current Good Manufacturing Practices ("cGMP"), and the
production facility (as such term is used in the Toll Manufacturing Agreement) is in compliance with all applicable material laws and regulations. (c) The Products are not prohibited within the
meaning of any applicable national, state or local law where Products are currently sold. (d) The Products have been manufactured to confirm with the Specifications (as defined in the Toll
Manufacturing Agreement) in accordance with the instructions and procedures that have been provided to Buyer.

5.8Technical Equipment and Other Personal
Property.



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5.9Real Property.



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5.9ARetained Units.



5.9BBuilding 120.



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5.10Ancillary Assets.    The Ancillary Assets include all material assets (other than
working capital) and rights necessary for, and are currently suitable and sufficient in quantity, quality and condition to enable Buyer to do, all of the manufacturing of the Products as contemplated
by the Toll Manufacturing Agreement, when used in association with the other Acquired Assets, and by the Transaction Agreements. Buyer understands that for being fully operational as contemplated by
the Transaction Agreements, the transition project as described in the Technical Services Agreement must have been implemented, which will only happen subsequent to Closing. Nevertheless, as of the
Closing Date, the status of the transition project will be such that Buyer is in a position to timely do toll manufacturing without any extraordinary efforts, cost or liability to any person.

5.11Compliance.    Seller is not aware of any facts or circumstances presently existing
which may reasonably give rise to any alleged violation of the legal requirements for manufacturing the Products at the Real Property. Seller has furnished to Buyer accurate and complete copies of
specific governmental notices of inspections and observations during the past two years, including without limitation FDA Form 483 and FDA Establishment Inspection Reports (EIRs).

5.12Consents.    Attached hereto as Schedule 5.12is a list of all consents and approvals which have not yet been
obtained, but are required with respect to implementing this
Agreement. There are no additional consents or approvals needed from anyone (e.g., governmental agency, third party, shareholders, Board, customers, vendors, owner of intellectual property, etc.) in
order for Seller to enter into this Agreement and for Seller to perform the obligations contemplated by this Agreement to be performed by Seller.

5.13Contravention.    Neither the execution, delivery, or performance of this Agreement or
of the Transaction Agreements will directly or indirectly cause Seller to be in contravention of or conflict with any other obligation of Seller.

5.14Absence of Material Adverse Change.    During the past two years, there has been no
Material Adverse Change in the operation of the Business, or in the nature and condition of the Acquired Assets, or in the composition, qualifications, and productivity of the Transferred Employees.
The persons listed inSchedule 5.9(g)(i)have no actual knowledge (whereby it is understood that such persons have no duty of independent
verification) of a fact that, as they actually know, is reasonably likely to result in a Material Adverse Change during the next two years, other than described in Schedule 5.14.

5.15Full Disclosure.    Seller has fully disclosed to Buyer all material relevant
information concerning the Acquired Assets and the Transferred Employees, which disclosures have been materially accurate and complete, and which disclosures have not contained any materially untrue
statements of material fact or omitted to state material facts required to be stated therein in order to make such statements not misleading.

5.16Confirmation of the Buyer.    Buyer confirms that as of the signing of this Agreement,
the persons listed inSchedule 5.2have no actual knowledge (whereby it is understood that such persons have no duty of independent verification)
of facts which are contrary to Seller's representation and which adversely affect the Acquired Assets; provided, however, this confirmation does not apply to any

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facts
that are actually known to the person's listed in Schedule 5.9g(i) (whereby it is understood that such person have no independent duty of verification).

5.17Capital Increase by Transfer of Assets
(Sachübernahmekapitalerhöhung).    Buyer represents and warrants that, shortly before the date hereof, Buyer's quota holders' meeting
approved an increase of Buyer's capital and Buyer's management filed for registration of such capital increase with the competent commercial register, and that the transaction set forth herein has
been properly disclosed as an intended acquisition in kind (beabsichtigte Sachübernahme) in the capital increase documentation filed with
the commercial register.

ARTICLE 6    COVENANTS AND AGREEMENTS

6.1Books and Records; Cooperation.    Seller shall, upon request of Buyer, deliver copies
or, where no longer needed by Seller or where reasonably needed by Buyer, originals of all books and records, documents and other information, in whatever form, relevant to the Acquired Assets and the
Transferred Employees, to Buyer at any time during the term of this Agreement. Seller shall permit Buyer to inspect books, records and documentation in relation to the Acquired Assets when and as
reasonably required by Buyer. To the extent that the books and records, documents and other information relate partially to Seller's assets and contracts other than the Acquired Assets and Transferred
Employees, Seller shall provide Buyer excised portions of such information. This Article also covers Seller's duty to provide to Buyer, at any time during the duration of this Agreement upon
Buyer's request, copy of the Regulatory Documentation, including the Registrations and all quality and safety related documentation, that may be required to obtain or maintain all necessary licences
from authorities to operate the Acquired Assets.

6.2Transferred Employees.



The
documents referred to inSchedule 6.2(a)(i), Schedule 6.2(a)(ii), and Schedule 6.2(a)(iii) to which reference is made in
Article 5.4 of this Agreement, were handed over by the Seller to Buyer's Swiss counsel at the signing of this Agreement.



In
connection with the transfer of the Transferred Employees, Buyer and Seller will offer to each of the Transferred Employees the Employment Transfer Letter Agreement attached hereto as
Exhibit 6.2(a), that their employment agreements be transferred to Buyer upon the Closing, with retroactive effective as of 1 January 2008, on terms which are substantially the same as the
Seller's Employment Terms in particular as far as the accrued holiday and overtime entitlements and the term of service are concerned, with the exceptions of certain guidelines and internal rules of
Arena as described in the Employment Transfer Letter Agreement (the "Buyer's Employment Terms"). For the avoidance of doubt, nothing contained in this
Agreement shall prevent Buyer from amending the terms and conditions of the employment with the Actual Transferred Employees following the Closing, in accordance with the applicable provisions of the
contractual and statutory provisions applicable to the said employment and

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subject
to the provisions set forth in Article 6.2(g) hereof, whereby it is understood that no amendment shall be made that imposes a financial burden on Seller.

Seller
shall be responsible for complying with all obligations under applicable law concerning the Transferred Employees with respect to the transactions contemplated by this Agreement
prior to the Closing. Seller shall send a notification and/or consult with the Transferred Employees with respect to the transactions contemplated by this Agreement prior to the signing of this
Agreement or the Closing. Immediately following execution of this Agreement, Seller shall procure all information and shall perform all consultation processes pursuant to applicable law, any
collective bargaining, company-wide collective agreement, shop, trade union, recognition, work council or other similar agreement, undertaking or practice in order to fully and properly inform and
consult with the Transferred Employees. A complete copy of the collective bargaining agreement dated 13 July 2007 entered into by Seller and as in force at the time of signing this Agreement has been
provided to Buyer. Buyer shall, until 31, December 2008, comply with the terms of such collective bargaining agreement, to the extent applicable to the Actual Transferred Employees. Seller hereby
agrees to timely inform Buyer of any proposed amendments or prolongations to any collective employment agreement applicable to any of the Actual Transferred Employees, and Seller agrees to not agree
to any such amendments or prolongations without Buyer's prior written consent, which consent shall not be unreasonably withheld.



With
regard to holiday, overtime, bonus and other similar entitlements accrued by the Actual Transferred Employees up to two days prior to the Effective Date, as well as seniority gifts
(Dienstaltersgeschenke)and leave gifts at regular retirement (Austrittsgeschenke bei ordentlicher
Pensionierung) payable within the next five years from the Effective Date, pursuant to the documents referred to in Schedule 6.2(a)(iii), as well as for any holiday,
overtime, bonus and similar entitlements accrued or otherwise applicable for services rendered by the Actual Transferred Employees up to the Closing, Seller shall compensate Buyer at the Closing Date
as set forth inSchedule 6.2(c). Any possible claims of Buyer under Seller's representations and warranties relating to the Actual Transferred
Employees remain reserved.



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6.3Further Assurances.    Following the Closing, Seller and Buyer will execute and deliver
such additional instruments, documents, conveyances or assurances, and take such other actions as shall be necessary, or otherwise reasonably requested by Seller or Buyer, as applicable, to confirm
and assure the rights and obligations provided for in this Agreement and render effective the consummation of the transactions contemplated hereby and thereby.

6.4Real Property Deed.    At or before the Closing, Buyer and Seller have signed the Real
Property Deed, in the form attached hereto asExhibit 6.4.

6.5Technical Services Agreement.    At the Closing, Buyer and Seller shall sign the
Technical Services Agreement in the form attached hereto asExhibit 6.5.

6.6API Manufacturing Agreement.    At the signing of this Agreement, Buyer and Seller have
entered into the API Manufacturing Agreement attached hereto asExhibit 6.6concerning long term toll manufacturing by Seller for Buyer, which
agreement shall only be effective upon the Closing.

6.7Toll Manufacturing Agreement.    At the Closing, Buyer and Seller shall sign the Toll
Manufacturing Agreement in the form attached hereto asExhibit 6.7concerning toll manufacturing by Buyer for Seller.

6.8Quality Agreement.    At the signing of this Agreement, Buyer and Seller shall have
entered into the Quality Agreement attached hereto asExhibit 6.8.

6.9[Intentionally deleted]

6.10Undertaking and Agreement in relation to the Use and Operation of Acquired
Assets.    Buyer undertakes to comply at all times with reasonable and appropriate safety, health and environmental standards and to adhere to safety, health and
environmental standards of Seller to the extent required by applicable law and regulations. Buyer further undertakes to only produce products and use substances in respect of which Buyer can
demonstrate that their production, use and handling on site is and will be in compliance with reasonable and appropriate safety, health and environmental standards as well as with applicable laws and
Permits.

6.11Maintenance and Capital
Investments.



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6.12Insurance.    Seller undertakes to maintain and insure all assets not expressly
forming part of the Acquired Assets, including all assets in or for common use. Seller further undertakes to keep appropriate insurance cover for all property and assets in Seller's care, custody or
control. The premiums and costs shall be shared among the Parties on an equitable basis in relation to their interests in the insured assets. The real property insurance will be maintained by Seller,
insuring Seller and Buyer each for their respective ownership interest in the Real Property, the Retained Units and the related common areas. Buyer undertakes to maintain and insure all Acquired
Assets and to maintain appropriate insurance cover for all Acquired Assets, except to the extent insured by Seller. The further details for describing the nature and amounts of said insurance
policies, and the allocation of the costs for such insurance policies, are set forth inSchedule 6.12.

6.13Environmental.Buyer and Seller agree that in relation to
any pollution or contamination in, on or above the land or the building floors of the Real Property or the Retained Units or building 120 that have been existing before the Closing (including for the
sake of clarity any pollution or contamination with asbestos), Seller shall be solely and exclusively liable for the payment of any investigation expenses (except those investigation expenses incurred
by Buyer within the course of the preparation of this Agreement) or of any excavation, depollution or sanitation costs, and for other damage and cost incurred by Buyer as a result of such pollution or
contamination; provided however, notwithstanding the foregoing, if there is a pre-Closing pollution or contamination which is legally permissible to remain "as is" but which is later legally required
to be removed or remedied because of construction work performed (or to be performed) on the Real Property by or on behalf of Buyer (or its successor), then Seller shall not be responsible for the
costs and expense for such a removal or remedy, except to the extent such cost or expense is required to be incurred under the Toll Manufacturing Agreement. It is understood that only such substances
may be regarded as pollution or contamination that today are recognized as a pollution or contamination by Swiss environmental laws (but including asbestos).

In
the event of any new pollution or contamination in, on or above the land or the building floors of the Real Property or of the Retained Units or building 120 being created after the
Closing, liability shall extend exclusively to the party causing or being otherwise responsible for such pollutione.g.based on art. 55
CO(the "Polluter"), and any and all cost of remediation to be undertaken upon order of the competent authority or upon unilateral but
reasonable request of either Party shall be borne by the Polluter. If more than one party is a Polluter, then such Polluters shall share in the liability to third parties and in any remediation cost
in accordance with their contribution in the causation of the liability or cost and, if applicable, in accordance with their responsibility on other groundse.g. based on
art. 55 CO.

To
the extent responsibility for any new pollution or contamination created after the Closing cannot be attributed to a Party as set forth in this Article, liability to third parties or
public entities and cost for remediation shall be attributed to the Parties in an equitable manner.

Seller
further covenants that it will not store on the Real Property or on the Retained Units any highly potent compounds such as steroids (androgens or estrogens), beta-lactams,
cyclosporins or other similar compounds that can potentially contaminate Buyer's products.

6.14Right of First Refusal of Buyer for Retained Units.    For a period of twenty-five
(25) years from the Closing, Buyer shall have a one (1) month right of first refusal ("Vorkaufsrecht") according to art. 216 CO as further
specified in the Real Property Deed in relation to any or all of Seller's Retained Units, exercisable at the price, terms, and conditions which Seller proposes for sale any or all of such Retained
Units to any third party buyer (collectively called the "Offer Terms"). If Buyer decides to purchase at the Offer Terms, Buyer must give written notice
of acceptance within one (1) month after

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Buyer's
receipt of the Offer Terms, whereupon a purchase and sale agreement will be entered into and consummated within three (3) months after Buyer's receipt of the Offer Terms. The purchase
agreement shall contain and be consistent with the Offer Terms. If Buyer does not so exercise and complete a purchase, then Seller will be free to sell the Retained Unit(s) having been subject to the
Offer Terms to a third party at price, terms and conditions not more favourable to the third party buyer than the Offer Terms within one (1) year following the date of Buyer's receipt of the
Offer Terms. If Seller proposes to sell the said Retained Unit(s) on terms more favourable to the third party buyer (when considered in the entirety) than the terms of the Offer Terms, then Buyer's
right of first refusal as described above will be applicable at such more favourable terms. If the Offer Terms include a non-monetary consideration, then said non-monetary consideration shall be
translated into a monetary consideration. If no agreement on such translation can be found, a third party expert, which has been selected by mutual agreement, shall be mandated to translate the
non-monetary consideration into a monetary consideration. If no agreement on the third party expert can be found, the expert shall be designated by the president of the Swiss Institute of Certified
Accountants and Tax Consultants or its successor organisation. This right of first refusal shall be entered ("vorgemerkt werden") in the real property
register relating to each of the Retained Units. This right of first refusal shall not be triggered in the event of a sale or transfer of any or all of the Retained Units to an Affiliate of Seller.
This right of first refusal will be binding on any third party purchaser so long as Buyer (or its Affiliate) continues to own or lease (under a Sale Leaseback) the Real Property during said 25-years
period. The right of first refusal must be exercised for all Retained Units proposed for sale at the same time for the same person.

6.15Right of First Refusal of Seller for Real
Property.



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6.15ASale and Leaseback.    Notwithstanding anything to the contrary, if Buyer sells the
Real Property to a third party and simultaneously enters into a leaseback of the entire Real Property for a term of at least ten (10) years and continues to occupy the Real Property for at least said
ten (10) years (a "Sale Leaseback"), then such Sale Leaseback shall not be considered a sale which triggers the first refusal rights set forth in Article 6.15. In the event of a Sale Leaseback, Buyer may also transfer to said third party the Technical Equipment and Other Personal Property
(including replacements), and/or Buyer's purchase options underArticles 6.16 and/or 6.18. After any such Sale Leaseback, Seller retains its
first refusal rights underArticle 6.15in case of a subsequent sale of the Real Property and/ or the Right of First Refusal Property (including
replacements) (excluding a sale back to Buyer or its Affiliates), and Seller retains its buyback right underArticle 6.19and any third party
purchaser in the Sale Leaseback shall be bound by and subject to the terms ofArticle 6.19.

6.16Purchase Option of Buyer for Retained Units.    For a period of ten (10) years from
Closing, Buyer shall have the right to purchase all of Seller's Retained Units, exercisable at a price of CHF 15,000,000 (Swiss Francs fifteen million) plus Inflation Adjustment, all as further
specified in the Real Property Deed. If such option is exercised, the purchase shall be completed upon the later of (i) the expiration of 24 months following the date of the written exercise
notice and (ii) three years after the Closing, whereby Seller agrees to complete the purchase before the expiration of these periods if Seller vacates the Retained Units earlier. Seller will
grant Buyer reasonable access to the Retained Unit to enable Buyer to start its planning process for any construction work it wish to perform. This right to purchase shall be entered
("vorgemerkt werden") in the real property register relating to each of the Retained Units, and shall be binding on any third party purchaser of all or
parts of Building 121 or of any interest therein. Said purchase and sale transaction shall be implemented by a purchase and sale agreement which shall include the terms which are reasonably
comparable to the

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representations
and warranties set forth in Article 5.9A (except for Article 5.9A(f)) and the covenants set forth in Article 6.13; and Seller will also warrant therein that the
Retained Units are free of all financial encumbrances, and any other encumbrances that materially impair the value of the Retained Units, and that the Retained Units are in good condition comparable
to today's conditions and that there is no further damage beyond reasonable wear and tear. If Seller wishes to or will materially deviate from the representations, warranties, covenants or terms set
forth above, such deviation shall be made, but there shall be a corresponding equitable reduction in the purchase price set forth above. The purchase option set forth in this Article 6.16 shall
only apply for so long as the Buyer (or its Affiliate) occupies the Real Property by its own operation.

6.17Sale Option of Seller for Retained Units.    Upon serving 12 months written notice,
Seller shall have the right to sell all of its Retained Units to Buyer, exercisable at a price of CHF 8,000,000 (Swiss Francs eight million) plus Inflation Adjustment, all as further specified
in the Real Property Deed. This right is exercisable effective as of the fifth anniversary of the Closing and thereafter any time up to the 25th anniversary of the Closing. In the event of a sale or
transfer of the Real Property to a third party, Buyer undertakes to impose Buyer's obligation under this Article upon such third party. Said purchase and sale transaction shall be implemented
by a purchase and sale agreement which shall include the terms which are reasonably comparable to the representations and warranties set forth in Article 5.9A (except for
Article 5.9A(f)) and the covenants set forth in Article 6.13; and Seller will warrant therein that the Retained Units are free of all financial encumbrances, and any other encumbrances
that materially impair the value of the Retained Unit; and that the Retained Units are in good condition comparable to today's conditions and that there is no further damage beyond reasonable wear and
tear. If Seller wishes to or will materially deviate from the representations, warranties, covenants or terms set forth above, such deviation shall be made, but there shall be a corresponding
equitable reduction in the purchase price set forth above.

Notwithstanding
anything to the contrary, this Article 6.17 shall expire and be of no further force or effect in the event the Real Property is sold to Seller pursuant to
Article 6.15 or if Seller does not exercise its right of first refusal within three (3) months after Seller's receipt of the Offer Terms (provided Buyer subsequently sells the Real
Property in compliance with Article 6.15).

6.18Purchase Option of Buyer for Building 120.    For a period of ten
(10) years from Closing, upon serving 24 months written notice, Buyer shall have the right to purchase Seller's Building 120, exercisable at a price of CHF 2,000,000 (Swiss
Francs two million) plus Inflation Adjustment, all as further specified in the Real Property Deed. This right to purchase shall be entered ("vorgemerkt
werden") in the real property register, and shall be binding on any third party purchaser. Said purchase and sale transaction shall be implemented by a purchase and sale
agreement which shall include the terms which are reasonably comparable to the representations and warranties set forth in Article 5.9B and the covenants set forth in Article 6.13; and
Seller will warrant therein that Building 120 is free of all financial encumbrances, and any other encumbrances that materially impair the value of Building 120; and that the
Building 120 is in good condition comparable to today's conditions and that there is no further damage beyond reasonable wear and tear. If Seller wishes to or will materially deviate from the
representations, warranties, covenants or terms set forth above, such deviation shall be made, but there shall be a corresponding equitable reduction in the purchase price set forth above. The
purchase option set forth in this Article 6.18 shall only apply for so long as the Buyer (or its Affiliate) occupies the Real Property by its own operation.

For
a period of two (2) years from the date ownership in Building 120 is transferred based on the purchase option set forth herein, Seller shall have a one
(1) month right of first refusal ("Vorkaufsrecht") according to art. 216 CO as further specified in the Real Property Deed in relation to the
Real Property, exercisable at a price of CHF 2,000,000 (Swiss Francs two million) plus Inflation Adjustment (such adjustment starting from Closing), all as further specified in the Real
Property Deed. This right of first refusal shall be entered ("vorgemerkt werden") in the real property register. This right

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of
first refusal shall not be triggered in the event of a sale or transfer to an Affiliate of Buyer or a Sale Leaseback.

6.19Seller's Right to Buy Back the Real Property.    (a) Subject to Buyer meanwhile not
having acquired the whole Building 121 (i.e. Buyer not having acquired all of Seller's Retained Units), and also subject to Seller (or its Affiliate) still owning any of the Retained Units in
Building 121, Seller shall, upon having given 24 months written advance notice to Buyer, as from six months before the 25th anniversary of the Closing, have the right to buy back
the Real Property at fair market price. In the event that Seller and the owner of the Real Property cannot agree, within 45 calendar days on a fair market price, such fair market price shall be
determined by an independent real property valuation expert to be mutually appointed by Seller and the owner of the Real Property within 20 calendar days. In the event that Seller and the owner
of the Real Property fail to timely agree on a real property valuation expert, such independent real property expert shall be appointed by the president of the Swiss Institute of Certified Accountants
and Tax Consultants or its successor organisation. Upon appointment of the expert, the expert shall make and deliver the expert's price determination in writing to Seller and the owner of the Real
Property as soon as the fair market price is determined. Before doing so, the expert shall have given both sides the fair opportunities to provide arguments and to comment on the arguments of the
other side. The independent real property valuation expert's fair market price determination shall be binding upon Seller and the owner of the Real Property, subject only to manifest error. Seller and
the owner of the Real Property undertake to equally share the fees and expenses of the independent real property valuation expert. The owner of the Real Property only represents and warrants that
Building 121 will be free of encumbrances that materially impair the value of Building 121 as compared to today's conditions and that there is no further damage beyond reasonable wear
and tear. This right to buy back is to be set forth in the Real Property Deed and shall be registered ("vorgemerkt werden") in the real property
register relating to the Real Property.

6.20Community of Co-Owners ("Stockwerkeigentümergemeinschaft").    Buyer
and Seller shall each delegate an equal number of authorized representatives into the meetings of the Community of Co-Owners. The rights and obligations of the Parties as the Co-Owners of the Real
Property are dealt with in the Co-Owners Regulations (Stockwerkeigentümer-Reglement) which forms part of the Real Property Documentation.

6.21Lock-in for Share Consideration.    Seller will not, during the period from date of
this Agreement through the third anniversary of the Closing, directly or indirectly (1) offer, pledge, assign, encumber, announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, any shares of Common Stock of Arena
("Arena Common Stock") or any securities
convertible into or exercisable or exchangeable for Common Stock owned either of record or beneficially (as defined in the Securities Exchange Act of 1934, as amended) by Seller on the date of the
Closing or hereafter acquired or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of Arena Common Stock, whether any
such transaction described in clause (1) or (2) above is to be settled by delivery of Arena Common Stock or such other securities, in cash or otherwise, or publicly announce an intention
to do any of the foregoing. The lock-in described in the previous sentence shall not apply to transfers to an Affiliate of Seller who has agreed to the same lock-in terms as Seller in this Section
6.21. A legend evidencing this lock-in restriction will be placed on the stock certificate evidencing the Share Consideration. Seller represents that it does not beneficially own any Arena Common
Stock as of the date of this Agreement (without giving effect to the Share Consideration), and that Seller has not hedged or otherwise sold short any Arena Common Stock. Nothing in this Agreement
shall restrict Seller from purchasing additional shares of Arena Common Stock and to resell such additional shares. After the expiration of the three year's period referred to above, Buyer agrees to
cooperate with Seller to have the legend attached to the share certificate removed, to the extent permitted.

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6.22Reference to DMF.    In order to assist Buyer to obtain appropriate governmental
approvals for manufacturing and selling products at the Real Property, Seller hereby grants to Buyer the right for Buyer to reference or otherwise incorporate and rely upon filings previously made by
Seller to governmental agencies (such as the United States Food and Drug Administration, and Swissmedic), such as the "Drug Master File" and standard operating procedures used for manufacturing at the
Real Property.

6.23Additional Assets.After the Closing Date, if Seller or
Buyer identify any assets in Seller possession which belong to the Acquired Assets but which Seller failed to transfer to Buyer at the Closing, Seller shall promptly transfer these assets to Buyer for
no additional consideration.

6.24Cantonal Production Approval.    Seller agrees to pay for the costs, including any
necessary changes to the Acquired Assets, which result from the requirements set forth in the Cantonal Operating Approval dated 16 July 2007. Seller further covenants to make all such changes prior to
Closing.

6.25Service and Maintenance Agreements, Lease Agreements for
Copiers.Schedule 6.25contains a list of service and maintenance agreements and of
lease and service agreements for copiers, split into (i) agreements to be transferred to Buyer and (ii) agreements that need to be renegotiated because they provide for services related
to both Seller's and Buyer's operations or cover both, copiers that are necessary for Seller's operations and copiers that are necessary for Buyer's operations. Seller and Buyer agree that the
agreements referred to under (i) above shall be transferred from Seller to Buyer forthwith subsequent to Closing. For such transfer, the consent of the counterparties of such contracts is
required. Further, Seller and Buyer agree that the agreements referred to under (ii) above shall be renegotiated by Seller, Buyer and the counterparties of such contracts forthwith subsequent
to Closing
to achieve a proper split of the services or leases provided for under these agreements as necessary for the operations of the Parties, whereby the copiers shall be split as provided in
Schedule 6.25. For the split, the consent of the counterparties of such contracts is required. For so long a counterparty does not consent to the transfer and/or split of the agreement
concerned, Seller shall use its commercially reasonable efforts to make available to Buyer the services and deliveries to be made under the agreement concerned and Buyer shall reimburse Seller for the
costs incurred by Seller under such agreement. Notwithstanding anything to the contrary in this Agreement, Buyer's only remedy towards Seller for damage caused by a counterparty that did not consent
to the transfer and/or split of its agreement under this Article 6.25 shall be the assignment of any corresponding damage claim Seller may have against such counterparty to Buyer. Seller is
entitled, but under no obligation to terminate any agreement which could not be transferred to Buyer. When terminating such agreements Seller shall forthwith inform Buyer when the terminated agreement
ends.

6.26Financial Statements.    Although it is not expected to be needed, if Buyer reasonably
determines that the U.S. Securities & Exchange Commission ("SEC") rules or agents require that Buyer include in Buyer's filings with the SEC certain financial statement information for Seller's
operations of the Acquired Assets for the past three years ("Past Financials"), then Seller will cooperate with Buyer and Seller will furnish to Buyer in a timely manner such required Past Financials,
including requesting and authorizing Seller's auditor to cooperate with Buyer's auditor for reviewing and auditing the Past Financials, if needed. Buyer hereby agrees to pay all reasonable costs
incurred for Seller and Seller's auditor to furnish and audit the Past Financials.

6.27Roof; Warranties.    Within forty-five (45) days of the Effective Date, Buyer shall
engage an independent contractor to inspect the roof of the Real Property. Buyer and Seller shall share equally in the cost of retrofitting the roof if any conditions that compromise the integrity of
the roof are identified during such inspection. Seller and Buyer shall cooperate in asserting any right to pursue claims under a warranty relating to the Real Property, and any proceeds from such a
claim shall be

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applied
to the Real Property first, with any excess proceeds being allocated according to the value ratio set forth in the Real Property Documentation.

6.28Cost relating to addressing conditions identified by internal quality
audits.    Seller and Buyer will cooperate to remediate the outstanding observations relating to product and personnel safety generated through Seller's internal
audit process that are necessary to be remediated to allow the facility to manufacture both Products under the Toll Manufacturing Agreement. Seller has budgeted CHF 100,000 for 2008 to
remediate these observations. Such costs are included in the calculation of standard costs for Products expected to be paid by Seller to Buyer under the Toll Manufacturing Agreement. Without limiting
any other provision of this Agreement, Seller agrees to pay for any out of pocket costs incurred by Buyer in satisfactorily addressing these observations, to the extent Buyer's costs are not otherwise
paid as part of the Standard Prices paid under the Toll Manufacturing Agreement.

6.29Land Registry Registration.    If for any reason the requisite registration in the
Land Registry is not completed by February 1, 2008, then the Parties shall take all actions necessary or appropriate (i) to
unwind the transactions contemplated by this Agreement, (ii) to rescind the purchase and sale transaction, (iii) to refund all consideration paid, (iv) to transfer back to Seller
all of the Acquired Assets and (v) to transfer back the Actual Transferred Employees.

ARTICLE 7    INDEMNITY

7.1Indemnification by Seller and Indemnification by Buyer.    Seller and Siegfried Holding
shall indemnify and hold harmless Buyer from and against all Damages that are suffered or incurred by Buyer arising directly from, or as a direct result of, any breach of a representation or warranty,
or covenant by Seller set forth in this Agreement. Buyer and Arena Pharmaceuticals, Inc. ("Arena") shall indemnify and hold harmless the Seller from and
against all Damages that are suffered or incurred by Seller directly from, or as a direct result of any breach of a representation, warranty or covenant by Buyer set forth in this Agreement. As used
herein, the term "Damages" is the amount required to put Buyer or Seller in the same position as if the breach had not occurred; and such Damages
include any loss, damage, injury, liability, claim, demand, settlement, judgment, award, fine, penalty, tax, fee, legal expense, professional expense, and related costs.

7.2Response to Indemnity Claim.    In the event that Buyer asserts any indemnification
claim against Seller or Siegfried Holding, and in the event that Seller asserts any indemnification claim against Buyer or Arena, in each case pursuant to Article 7.1, such indemnification claim
shall be submitted to Seller or, as the case may be, to Buyer in writing, together with an explanation of
the basis for the indemnification claim and the estimated amount of the indemnification claim (if such an estimate can reasonably be made) (the "Indemnity Claim
Notice"). The Parties expressly waive all examination and notification requirements under art. 201 CO. The Parties shall cooperate with each other, and use good faith efforts,
to take all reasonable actions to endeavor to mitigate the Damages and to resolve any disputes concerning the indemnification claim. If the Parties are unable to mutually resolve any such disputes
within forty (40) days after delivery of the Indemnity Claim Notice, the disputes shall be resolved in accordance with the arbitration procedures set forth in Article 8.10hereof. If the
indemnification claim involves a claim by a third party (as distinguished from a claim by Buyer or Seller), Seller
or, as the case may be, Buyer shall have the first right to assume the defense of such third party claim, at Seller's or, as the case may be, Buyer's sole expense. If Seller or, as the case may be
Buyer, does not promptly so assume the defense of such third party claim, then Buyer or, as the case may be, Seller may do so at its/their reasonable expense, retaining the right to recover such
expenses as an indemnification claim.

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7.3Threshold Level.    Notwithstanding anything to the contrary contained in this Article 7, Seller and Siegfried
Holding on the one hand and Buyer and Arena on the other hand shall have no obligation to pay for any
indemnification claim arising from a breach of a representation or warranty,unless and until the aggregate cumulative amount of such claims exceed the
amount of CHF 200,000 (the "Threshold Level"). If and when the aggregate of such claims exceeds the Threshold Level, then Seller and Siegfried
Holding or, as the case may be, Buyer and Arena shall be obligated for all of such indemnity claims, including the Threshold Level amount.

7.4Indemnification Cap.    Subject to the exceptions in the second sentence hereof, Seller
and Siegfried Holding on the one hand, and Buyer and Arena on the other hand, shall not be required to make any indemnification payments pursuant to this Agreement in the aggregate cumulative amounts
exceeding CHF 5 (five) million (the "Indemnification Cap"). The Indemnification Cap shall not be applicable to any indemnification claims arising
from (i) Seller's or Siegfried Holding's or, as the case may be Buyer's or Arena's, intentional or fraudulent misrepresentation, (ii) Seller's or Siegfried Holding's or, as the case may
be Buyer's or Arena's, willful breach of any covenant or obligation of the Seller or Buyer or Arena respectively, (iii) any defect in title to any of the Acquired Assets or any problem with
conveying unencumbered good title to the Acquired Assets, (iv) any third party's claims to any of the Acquired Assets, (v) Seller's breach of any of the representations and warranties
set forth inArticle 5.1,Article 5.5, Article 5.8(a),Article 5.9(a)-(e)or Article 5.11, and any breach of the covenants set forth inArticle 6.2(c),
Article 6.2(d)andArticle 6.13.

7.5Indemnity Offset.    Buyer and Seller shall be entitled to set-off as provided by the
applicable law.

7.6Time Limitations.    Buyer on the one hand and Seller on the other hand shall not be
entitled to assert any indemnification claim for a breach of a warranty or representation underArticle 5unless it is first asserted in writing
in accordance withArticle 7.2within the relevant warranty period specified in the relevant section of Article 5. Once an Indemnity Claim Notice
is timely submitted in accordance with this Article, the subject claim shall be processed to conclusion
even though time goes beyond the relevant warranty period. The provisions of art. 210 CO are hereby waived and replaced by the above.

ARTICLE 8    MISCELLANEOUS

8.1Assignment.    This Agreement may not be assigned or otherwise transferred by either
Party without the consent of the other Parties, which consent shall not be unreasonably withheld. Any purported assignment in violation of the preceding sentence shall be void. Nothing in this
Agreement, express or
implied, is intended to or shall confer upon any other Person or Persons any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

8.2Expenses.    Except as otherwise specified in this Agreement, each Party shall bear its
own expenses with respect to the transactions contemplated by this Agreement, including, without limitation, attorneys' fees and other expenses related to the preparation and execution of this
Agreement and any Transaction Agreement and the completion of this Agreement and any Transaction Agreement. All of the notary cost for the parceling, the formation of the condominium-principled
co-ownership units (Stockwerkeigentums-Einheiten) in relation to the Real Property Deed and any real property transfer Tax shall be equally shared
between Seller and Buyer.

8.3Confidentiality.    During the term of this Agreement the Parties shall, and shall
cause their employees, representatives and advisors to, maintain in confidence the content of this Agreement and the Ancillary Agreements, subject always to the Parties' legal or regulatory
obligations for disclosure.

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8.4Public Announcement Pertaining to this Agreement and the Transaction
Agreements.    Buyer and Seller shall consult before issuing media releases or otherwise making any public statements, and they shall not issue any such media release
or statement without the prior approval of the other, except it being understood that the Parties shall be free to timely comply with legal and/or regulatory disclosure requirements (in particular
with requirements of the stock exchanges where a Party is listed) without the prior approval from the other Party, in which case such Party shall immediately inform the other Party of such disclosure
requirements and of the contents of the planned disclosure. The Parties have agreed on a media release regarding the Transaction prior to the signing of this Agreement.

8.5Severability.    Each of the provisions contained in this Agreement shall be severable,
the unenforceability of one shall not affect the enforceability of any others or of the remainder of this Agreement, and to the greatest extent legally possible, effect shall be given to the intent
manifested by any provision held invalid or inoperative.

8.6Amendment.    This Agreement may not be amended, supplemented or otherwise modified
except by an instrument in writing signed by all of the Parties hereto.

8.7Waiver.    The failure of any Party to enforce any condition or part of this Agreement
at any time shall not be construed as a waiver of that condition or part, nor shall it forfeit any rights to future enforcement thereof.

8.8Governing Law.    This Agreement and all documents related thereto shall be governed by
the laws of Switzerland, excluding the United Nations Convention on the International Sales of Goods, except if otherwise stated in writing in any such related document.

8.9Term of this Agreement.    This Agreement is firm for a period expiring at the 25th
anniversary of the Closing, except to the extent otherwise agreed in writing by the Parties and except to the extent it becomes redundant before.

8.10Arbitration; Venue.    Any and all disputes arising under this Agreement shall be
finally settled by arbitration (1) if it is an international arbitration, under the Swiss Rules of International Arbitration of the Swiss Chambers of Commerce or, (2) if it is an
internal arbitration, under the Arbitration Rules of the Zurich Chamber of Commerce, each in force on the date when the notice of arbitration is submitted. The number of arbitrators shall be three.
The seat of the arbitration shall be in Zurich and English shall be the language of the arbitration. If disputes are arising at the same time out of or relating to two or more agreements connected to
this Agreement, the same arbitrators will be appointed in all cases. The party who prevails in any arbitration shall also be awarded its reasonable attorneys fees incurred in connection with the
arbitrated dispute in line with the degree of its prevailing as determined by the arbitrators. Notwithstanding the foregoing, either Party may seek interim or conservatory measures from any competent
judicial authority.

8.11Counterparts; Language.    The Parties may execute this Agreement in one or more
counterparts, and each fully executed counterpart shall be deemed an original. This Agreement in the English language shall be the controlling text in as far as allowable under applicable law.
Execution and delivery of this Agreement may be evidenced by facsimile telecopier transmission of a signed copy of this Agreement.

8.12Notices.    All communications, notices and consents provided for herein shall be in
writing and be given in person or by means of facsimile (with request for assurance of receipt in a manner typical with respect to communications of that type) or by registered mail or overnight
courier, and shall become effective: (a) on delivery if given in person; (b) on the date of transmission if sent by facsimile; or (c) upon receipt if delivered through registered
mail or courier service.

23

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Notices
shall be addressed as follows:

If
to Seller, to:



With
copy to:



If
to Buyer, to:



With
copy to:



provided, however, that if any Party shall have designated a different address by notice to the others, then to the last address so designated.

[REMAINDER OF THE PAGE LEFT IN BLANK INTENTIONALLY]

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IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written.

|Seller:                    |                        
|-------------------------- | -----------------------
|Siegfried Ltd.             |                        
|By:                        | /s/DOUGLAS C. GÜNTHARDT
|Name:                      | Douglas C. Günthardt   
|Title:                     | CEO                    
|By:                        | /s/RICHARD SCHINDLER   
|Name:                      | Richard Schindler      
|Title:                     | CFO                    
|Buyer:                     |                        
|Arena Pharmaceuticals GmbH |                        
|By:                        | /s/MARTIN WEBER        
|Name:                      | Martin Weber           
|Title:                     | Managing Director      

The
undersigned Arena Pharmaceuticals, Inc., hereby agrees to be bound by the terms ofArticles 3.1and 3.2to issue the Share Consideration and to be
also bound by other terms of this Agreement relevant to it, in particular, without limitation, to Articles 7and8, including in particular the
arbitration clause pursuant to Article 8.10.

|Arena Pharmaceuticals, Inc. |                     
|--------------------------- | --------------------
|By:                         | /s/ROBERT E. HOFFMAN
|Name:                       | Robert E. Hoffman   
|Title:                      | VP, Finance and CFO 

The
undersigned Siegfried Holding AG, hereby agrees to be bound by terms of this Agreement relevant to it, in particular, without limitation, to Articles 7and8, including in particular the arbitration clause pursuant to Article 8.10.

|Siegfried Holding AG |                         |  | 
|-------------------- | ----------------------- |  | 
|By:                  | /s/DOUGLAS C. GÜNTHARDT |  | 
|Name:                | Douglas C. Günthardt    |  | 
|Title:               | CEO                     |  | 

25

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SCHEDULE 1.1    DEFINITIONS

"Acquired Assets" are defined inArticle 2.1and includes
the Real Property, the Technical Equipment and Other Personal Property, and the Ancillary Assets.

"Actual Transferred Employees" are defined in Article 2.2(b).

"Affiliate" shall mean, with respect to any Person, any other Person directly or indirectly controlling or controlled by, or under direct
or indirect common control with, such Person. For purposes of this definition, a Person shall be deemed to control another Person if it owns or controls, directly or indirectly, at least fifty percent
(50%) of the voting equity of the other Person (or other comparable ownership if the Person is not a corporation).

"Agreement" shall mean this Asset Purchase Agreement (including its Schedules, but, for the avoidance of doubt, excluding the agreements
referred to in the Exhibits), as amended, modified or supplemented from time to time.

"Ancillary Assets" shall mean the items listed inSchedule 2.1(c).

"Arena" means Arena Pharmaceuticals, Inc., a company organized under the laws of Delaware, USA, and listed on Nasdaq.

"Arena Common Stock" is defined in Article 6.21.

"Building 120" shall mean the building and land on plot number 3622.

"Building 121" shall mean the building and land on plot number 3621.

"Business"is defined in Article 2.3.

"Buyer" means Arena Pharmaceuticals GmbH, a company organized under the laws of Switzerland with its registered office at c/o Siegfried
Holding AG, Untere Brühlstrasse 4, 4800 Zofingen, Switzerland.

"Buyer's Employment Terms" are defined inArticle 6.2(b).

"Cantonal Operating Approval" shall mean the cantonal plan approval and operating approval, dated 16 July 2007, issued by the
Cantonal Department for Economy and Internal Affairs of the Canton of Aargau, relating to the modified use of Building 121, attached hereto as Schedule 4.2(a)(ii).

"Cash Consideration" is defined inArticle 3.1.

"CC" means the Swiss Civil Code ("Schweizerisches Zivilgesetzbuch") as amended from time to time.

"Closing" shall mean the date of consumption of this Agreement as stated in Article 4.1.

"Closing Date" shall have the meaning ascribed to it inArticle 4.1.

"CO" means the Swiss Code of Obligations ("Schweizerisches Obligationenrecht") as amended from time to time.

"Consent" shall mean any consent, approval, authorization, consultation, waiver, permit, grant, agreement, license, certificate,
exemption, order, registration, declaration, filing or notice of, with or to any Person or under any law, in each case required to permit the consummation of any of the transactions contemplated
hereby.

"Co-Owners Regulations" shall have the meaning as ascribed to it inArticle 6.20.

"Damages" are defined inArticle 7.1.

"Days" mans calendar days unless otherwise specified.

"Effective Date" means the date of this Agreement first above written.

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"Encumbrance" shall mean with respect to any of the Acquired Assets, any lien, mortgage, adverse ownership claim, restriction, pledge,
security interest, easement, servitude, lease, right to use, other encumbrance, and/or any other third party rights.

"Governmental Approval" shall mean any Consent of, with or from any Governmental Authority.

"Governmental Authority" shall mean any federal, state, provincial or local government, quasi-governmental authority, or other political
subdivision thereof; any entity, authority, instrumentality or body exercising executive, legislative, judicial, regulatory or administrative functions of any such government, quasi-governmental
authority or other political subdivision; and any supranational organization exercising such functions for any sovereign states, whether international, multinational, regional or otherwise.

"Governmental Order" shall mean, with respect to any Person, any judgment, order, writ, injunction, decree, stipulation, agreement,
determination or award entered or issued by or with any Governmental Authority and binding on such Person.

"Indemnification Cap" is defined inArticle 7.4.

"Indemnity Claim Notice" is defined inArticle 7.2.

"Inflation Adjustment" shall mean an adjustment of a base amount to be made as of the end of a specific multi year period after the
Closing, such adjustment being the compounded amount of annual adjustments calculated as of January 1 of each year pursuant to the official Swiss consumer prices inflation rate published as of the end
of the preceding calendar year with such compounded amount of annual adjustments, but capped at the amount resulting if the annual inflation rate over the considered period had been 3 per cent
annually.

"Material Adverse Change" shall mean a change in facts and circumstances which had, or could reasonably be expected to have, individually
or in the aggregate, a material adverse effect on the Acquired Assets or the prospects for the business operations to be conducted with the Acquired Assets.

"Offer Terms" is defined in Article 6.14 and in Article 6.15(a).

"Parties" means Seller and Buyer, which may individually be referred to herein as a
"Party"

"Permits" shall mean licenses, consents, approvals, permits and other Governmental Approvals.

"Permitted Encumbrance" shall mean exclusively easements, encroachments, restrictions of way, servitudes or other restrictions valid by
virtue of law or registered in the real property register or to be registered based on the Real Property Documentation, as well as zoning, building and other similar public law restrictions.

"Person" shall mean an individual or a legal entity or a quasi-legal entity such as a partnership.

"Polluter" is defined inArticle 6.13.

"Products" shall mean those products described inExhibit 6.7(Toll Manufacturing
Agreement) to be manufactured by Buyer.

"Purchase Price" is defined inArticle 3.1.

"Real Property" is defined inArticle 2.1(a).

"Real Property Deed" is defined inArticle 6.4and shown as Exhibit 6.4.

"Real Property Documentation" shall include the Real Property Deed, the Co-Owners Regulations, and the parcelling of the original
property.

"Registrations" shall mean the product registrations currently held by Seller relating to the Products, issued by the Governmental
Authorities.

"Regulatory Documentation" shall mean, in relation to Products or the Acquired Assets, the Registrations supported by and including:
(i) the original documents under the possession of Seller (or

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that
are accessible to Seller using commercially reasonable efforts) evidencing the Registrations issued to Seller by a Governmental Authority, in each case to the extent assignable with or without
the consent of the issuing Governmental Authority; and (ii) all related Registration applications, clinical research and trial agreements and other documentation, research tools, laboratory
notebooks, files and correspondence with regulatory agencies and quality reports and all relevant pricing information and correspondence with Governmental Authorities with respect to such pricing
matters.

"Retained Units" are defined inArticle 2.1(a).

"Sale Leaseback" is defined in Article 6.15A.

"Seller" means Siegfried Ltd. , a company organized under the laws of Switzerland with registered office at Untere
Brühlstrasse 4, 4800 Zofingen, Switzerland.

"Seller's Employment Terms" are defined inArticle 6.2(b).

"Share Consideration" is defined inArticle 3.1.

"Siegfried Holding" means Siegfried Holding AG, a company organized under the laws of Switzerland and listed on the Swiss stock exchange.

"Tax or Taxes" shall mean any taxes of any kind including, but not limited to those measured on, measured by or referred to as, income,
alternative or add-on minimum, gross receipts, capital, capital gains, sales, use, ad valorem, franchise, profits, license, privilege, transfer, withholding, payroll, employment, social, excise,
severance, stamp, occupation, premium, value added, property, environmental or windfall profits taxes, customs, duties or similar fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any Governmental Authority.

"Technical Equipment and Other Personal Property" shall mean all tangible personal property, including machinery, equipment, mechanical
and spare parts, supplies, fixtures, tools and other tangible property of any kind held by Seller to the extent listed on Schedule 2.1 (b).

"Technical Services Agreement"is defined in Article 6.5 and attached hereto as
Exhibit 6.5.

"Threshold Level" is defined inArticle 7.3.

"API Manufacturing Agreement"is defined in Article 6.6 and attached hereto as
Exhibit 6.6.

"Toll Manufacturing Agreement"is defined in Article 6.7 and attached hereto as
Exhibit 6.7.

"Transaction Agreements" shall mean the Real Property Deed, and the agreements and undertakings shown in the Exhibits to this Agreement,
as amended, modified or supplemented from time to time.

"Transferred Employees" is defined inArticle 6.2.

"VAT" is defined in Article 3.3(a).

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