Pfizer is spending $6.7 billion to buy a drugmaker that is developing treatments for inflammatory conditions such as Crohn's disease but has no products on the market.

The pharmaceutical giant said Monday it will pay $100 in cash for each share of Arena Pharmaceuticals in a deal already approved by the boards of both companies.

Shares of Arena nearly doubled after the deal was announced Monday.

Pfizer believes that Arena will bolster its expertise in inflammation and immunology. It plans to pay for the acquisition with cash on hand.

Arena has a potential treatment for ulcerative colitis in late-stage clinical testing that it also is testing to treat Chrohn's disease. The company is developing possible treatments is in dermatology and for acute heart failure.

The sale price appears reasonable, given that Arena sales are expected to approach $3 billion in 2030, said Dr. Vamil Divan, an analyst for Mizuho Securities USA.

Divan likes Pfizer's aggressive use of cash that the company has or will receive from its COVID-19 vaccine and potential treatment.

Pfizer has said it expects to book about $36 billion in sales this year from its vaccine, Comirnaty. The drugmaker also has developed a potential pill treatment for the virus that could be approved soon.

"We assume they will look to continue to aggressively use their 'COVID cash' for bolt-on deals like Arena that can boost the company's mid-late stage pipeline," Divan wrote in a research note.

Arena Pharmaceuticals Inc., based in Park City, Utah, has lost nearly $461,000 through the first nine months of this year. Most of its revenue comes from royalties.

Arena's stock rose 83% to top $90 Monday, surpassing a high for the year of around $85 that the shares had reached in February.

Pfizer shares climbed nearly 4% to $54.78 while broader indexes slipped.

Tom Murphy reports for the Associated Press.

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