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Arena Pharmaceuticals (ARNA) Q4 Earnings: What to Expect?

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Arena Pharmaceuticals, Inc.  is expected to report fourth-quarter 2016 results next month. The company delivered a positive earnings surprise of 28.57% last quarter. Over the four trailing quarters, it has recorded an average positive surprise of 11.43%. Let’s see how things are shaping up for this quarter.

Arena’s share price has increased 2.1% this year so far, lower than the 6.1% gain for the Zacks classified Medical-Biomed/Genetics industry.

 

Factors at Play

The only approved product in Arena’s portfolio is obesity treatment, Belviq, which has so far had an unimpressive performance. Actually, ramping up sales in the U.S. anti-obesity market is challenging due to several factors including the tendency of healthcare providers to treat the symptoms of obesity instead of the disease itself, a narrow focus on certain patient types for treatment and historically low third-party insurance coverage.

Nevertheless, during the quarter (Oct 2016), the company launched the once-daily formulation of Belviq (Belviq XR), which should bring in some revenues this quarter. However, Belviq sales are expected to pick up once results of the cardiovascular outcomes trial are out and are added to the product label, if positive.

During the upcoming release, investors are expected to focus on the company’s progress with its pipeline and the impact of its streamlining efforts. Interesting candidates in Arena’s pipeline include etrasimod (phase II – ulcerative colitis) and ralinepag (phase II – pulmonary arterial hypertension) among others.

What Our Model Indicates

Our proven model does not conclusively show that Arena is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.

Zacks ESP:The Earnings ESP for Arena is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 9 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank : Arena has a Zacks Rank #4 (Sell). Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Pacira Pharmaceuticals, Inc. (PCRX - Free Report) is scheduled to release results on Mar 1. The company has an Earnings ESP of +20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Keryx Biopharmaceuticals, Inc. has an Earnings ESP of +37.04% and a Zacks Rank #3. The company is expected to release results on Mar 1.

Syndax Pharmaceuticals, Inc. (SNDX - Free Report) is scheduled to release results on Mar 2. The company has an Earnings ESP of +18.18% and a Zacks Rank #3.

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