[Arena Letterhead] August 1, 2011

You will be granted 200,000 stock options that entitle you to purchase Arena stock at a price and on terms to be determined by the Compensation Committee of the Board of Directors. The stock options will be subject to a four-year vesting schedule (25% every 12 months), contingent upon your remaining an Arena employee. The Arena performance-based restricted stock unit awards and unexercised stock options you formerly held have been terminated or forfeited.

You will be a participant under Arena’s Annual Incentive Plan on a prorated basis based on your service from your date of hire to the end of 2011, with your incentive award determined based only on Arena’s 2011 corporate goals.

You will be a participant under Arena’s Amended and Restated Severance Benefit Plan, dated effective December 30, 2008. The Termination Protection Agreement you formerly had with Arena terminated.

You will continue to be a party to the June 2007 Indemnification Agreement with Arena.

You will be eligible to participate in the employee benefit programs provided by Arena, which currently include medical, flexible spending account for dental, vision and other eligible expenses, life, AD&D, short-term and long-term disability insurance programs, a 401(k) plan and Employee Stock Purchase Plan (ESPP).

Verification of your eligibility to work in the United States, as required by the Immigration Reform and Control Act of 1986. You must complete section 1 only of the attached* I-9 form and provide the required documentation on your first day of employment.

Execution of the attached* Employee Proprietary Information and Inventions Agreement, which specifies your responsibilities regarding proprietary information, trade secrets and intellectual property.

Completion and confirmation of all other required employment and benefits forms, including the attached* Policy-Protection of Material Information/Prevention of Insider Trading; Policy Against Harassment; IT Security and Compliance Policy; Code of Business Conduct and Ethics; Policy on Filing, Receipt and Treatment of Complaints; Publication Policy; and Laboratory Notebook Policy.