Shareholders of Arena Pharmaceuticals (NASDAQ:ARNA) endured a significant drop in share prices last month only to see shares win back some of their gains this month after the company announced the departure of its co-founder and CEO.

Although a fresh set of eyes in the C-suite could begin to repair the significant damage done to shareholder value over the past few years, the company's challenges extend far beyond its leadership and, without a major cost-cutting program, the struggles facing Arena Pharmaceuticals makes it too risky of a stock to buy.