Arena Pharmaceuticals, Inc. announced the formation of Beacon Discovery Inc., a private drug discovery enterprise to develop compounds that that can be used for drug discovery and early-stage development.
 

Beacon will focus on identifying and advancing molecules by leveraging the experience gained at Arena. The launch of Beacon is aimed at building on Arena's historical research platform.
 

Beacon also plans to associate global pharmaceutical partners in the drug discovery and early-stage development process.
 

Arena will have certain rights to compounds developed by Beacon and will be entitled to some of the latter’s future cash flows.
 

Arena has a few early- to mid-stage candidates in its pipeline targeting various therapeutic areas. For the development of its pipeline, the company has inked collaboration agreements with companies like Axovant (nelotanserin for central nervous system disorders; currently in phase II studies), Ildong (temanogrel for thrombotic diseases – phase I study ongoing) and Boehringer Ingelheim (preclinical development of candidates targeting a central nervous system receptor for psychiatric diseases).
 

Beacon will also assist Arena in the execution of the company’s proprietary pipeline programs, including the collaboration with Boehringer Ingelheim.
 

However, Arena currently has a Zacks Rank #4 (Sell). The company is facing a tough time now, with its only approved product Belviq, approved for the treatment of obesity, recoding lackluster sales. Belviq was launched in Jun 2013. However, the drug is yet to gain approval in the EU, where the marketing application was withdrawn in 2013. Companies like Novo Nordisk and Orexigen have already got a head start in the EU, where their obesity treatments were approved in 2015. Moreover, Arena has decided to drop certain lifecycle management programs on Belviq.

Stocks to Consider
 

Some better-ranked stocks in medical genetics sector include ANI Pharmaceuticals, Inc. (ANIP Quick QuoteANIP - Free Report) , Anika Therapeutics Inc. (ANIK Quick QuoteANIK - Free Report) and Cambrex Corporation . Each of these stocks sports a Zacks Rank #1 (Strong Buy).