Any delusions investors had that Arena Pharmaceuticals (Nasdaq: ARNA) was going to have an easy time gaining a quick Food and Drug Administration approval for its obesity drug lorcaserin should be thrown out the window.

The development-stage drugmaker announced a private secondary offering yesterday. In and of itself, the offering isn't a big deal. Sure, selling new shares at this low level is very costly, diluting shareholders substantially. But raising cash is a necessary evil of drug development.

The real tell is in the terms of the deal and what the company plans to do with the proceeds. Arena sold 12.15 million shares to Deerfield Management for $1.46 per share and preferred stock that entitles Deerfield to another 12.15 million shares at the same relative price.

All told, Arena should rake in $35.5 million on the deal. What's Arena going to do with the money? Half will go toward paying back a loan to -- you guessed it -- Deerfield. The loan wasn't due until June 2013, making this looks more like a refinance -- trading debt for equity -- rather than a cash raise. If Arena thought its share price would be higher before June 2013, wouldn't it be worth it to wait until the share price had increased before refinancing?

It doesn't look like Deerfield has much confidence in a quick recovery for Arena, either. As part of the deal, Deerfield also gets the exercise price reduced on 14.4 million of the 16.2 million outstanding warrants it owns. It'll now be able to exercise those warrants at $1.68, reduced from $3.45, and has until June 17, 2015, rather than June 17, 2013, to exercise them. At the very least, that's a sign that Deerfield wants to hedge its bet with added time; I'd argue that it means the investment group thinks there's a slim chance of shares jumping before 2013.

The FDA seems to have a laundry list for Arena to complete before it'll approve lorcaserin and hasn't been particularly easy on its competitors -- VIVUS' (Nasdaq: VVUS) Qnexa and Orexigen Therapeutics' (Nasdaq: OREX) Contrave -- either.

The other half of the $35.5 million will help Arena live a little longer, but after the FDA pulled Abbott Labs' (NYSE: ABT) Meridia from the market, investors should be careful expecting anything other than additional grief even if Arena is able to answer the FDA's current questions.

Interested in keeping track of Arena as it tries to gain FDA approval of lorcaserin? Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on Arena.

Motley Fool Rule Breakers is always on the hunt for hot drug stocks and other cutting-edge picks. Click here to see all of our latest discoveries with a free 30-day trial subscription.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool owns shares of Abbott Laboratories. Motley Fool Alpha LLC owns shares of Abbott Laboratories. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.