Arena Seeking a Full BLOOM

Arena Pharmaceuticals, Inc.'s (ARNA - Snapshot Report) leading pipeline candidate, lorcaserin for obesity, continues is its phase III program. Although we remain somewhat skeptical of lorcaserin's potential, Arena's stock is looking attractive on a long-term basis given the likelihood that Arena will eventually sign a commercialization partnership for the drug in 2009.

However, the lack of a partnership in 2008 has caused a significant decline in the shares and Arena's cash position is now becoming a concern. A partnership in 2009 is a must to avoid a big dilutive offering.

While we wait for the results of BLOOM, and an update on the commercialization strategy, we expect Arena's stock will continue to struggle. There seems little to drive the shares higher before March 2009.

Read the full analyst report on ARNA

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