A month has gone by since the last earnings report for Arena Pharmaceuticals, Inc. . Shares have added about 7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is ARNA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Arena Pharmaceuticals Q4 Loss Narrows, Sales Decline Y/Y
Arena Pharmaceuticals reported a loss of 36 cents per share in the fourth quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 65 cents. However, the company posted earnings of $2.02 in the year-ago quarter.
Total revenues in the quarter were $15.4 million, substantially down 77.7% from the year-ago quarter due to lower collaboration and other revenues. However, the top line beat the Zacks Consensus Estimate of $4 million. Revenues include $14.2 million from collaboration revenues and $1.2 million in royalty revenues under the collaboration agreement with respect to Belviq.
Quarter in Detail
During the fourth quarter of 2017, the company did not record any sale of Belviq, the only approved product in Arena’s portfolio for chronic weight management in adult patients.
Notably, Belviq, the first obesity drug to be approved by the FDA in over a decade, is yet to impress with its performance. An extended-release version was launched in October 2016. However, sales have been dull so far.
Research & development (R&D) expenses significantly increased 78% from the year-ago level to $20.7 million.
Selling, general and administrative (SG&A) expenses were also up 18.6% to $8.3 million in the fourth quarter of 2017.
2017 Results
Full-year sales stood at $21.3 million, missing the Zacks Consensus Estimate of $27 million. Moreover, the top line significantly decreased 76.9% compared with the year-ago tally of $92.2 million.
The full-year loss of $2.87 per share was narrower than the Zacks Consensus Estimate of $3.13. However, the figure is wider than the year-ago loss of 49 cents.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a flat path over the past two months. In the past month, the consensus estimate has shifted by 7.2% due to these changes.
Arena Pharmaceuticals, Inc. Price and Consensus
VGM Scores
At this time, ARNA has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
ARNA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Arena Pharmaceuticals (ARNA) Up 7% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Arena Pharmaceuticals, Inc. . Shares have added about 7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is ARNA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Arena Pharmaceuticals Q4 Loss Narrows, Sales Decline Y/Y
Arena Pharmaceuticals reported a loss of 36 cents per share in the fourth quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 65 cents. However, the company posted earnings of $2.02 in the year-ago quarter.
Total revenues in the quarter were $15.4 million, substantially down 77.7% from the year-ago quarter due to lower collaboration and other revenues. However, the top line beat the Zacks Consensus Estimate of $4 million. Revenues include $14.2 million from collaboration revenues and $1.2 million in royalty revenues under the collaboration agreement with respect to Belviq.
Quarter in Detail
During the fourth quarter of 2017, the company did not record any sale of Belviq, the only approved product in Arena’s portfolio for chronic weight management in adult patients.
Notably, Belviq, the first obesity drug to be approved by the FDA in over a decade, is yet to impress with its performance. An extended-release version was launched in October 2016. However, sales have been dull so far.
Research & development (R&D) expenses significantly increased 78% from the year-ago level to $20.7 million.
Selling, general and administrative (SG&A) expenses were also up 18.6% to $8.3 million in the fourth quarter of 2017.
2017 Results
Full-year sales stood at $21.3 million, missing the Zacks Consensus Estimate of $27 million. Moreover, the top line significantly decreased 76.9% compared with the year-ago tally of $92.2 million.
The full-year loss of $2.87 per share was narrower than the Zacks Consensus Estimate of $3.13. However, the figure is wider than the year-ago loss of 49 cents.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a flat path over the past two months. In the past month, the consensus estimate has shifted by 7.2% due to these changes.
Arena Pharmaceuticals, Inc. Price and Consensus
Arena Pharmaceuticals, Inc. Price and Consensus | Arena Pharmaceuticals, Inc. Quote
VGM Scores
At this time, ARNA has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
ARNA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.