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Arena Pharmaceuticals, Inc. (ARNA - Snapshot Report) recently announced that patient dosing in a randomized, double-blind and placebo-controlled phase I study being conducted on APD334 has commenced.

The phase I study will focus on the safety, tolerability and pharmacokinetics of single-ascending doses of APD334. The candidate, which targets the sphingosine 1-phosphate subtype 1 (S1P1) receptor, may have the potential to be developed for autoimmune diseases like multiple sclerosis, psoriasis and rheumatoid arthritis.

While Arena Pharma is working on advancing its pipeline, we expect the company’s main focus to remain on the commercialization of its obesity drug, Belviq, in the US. Belviq gained Food and Drug Administration (FDA) approval in Jun 2012 for chronic weight management in adults who are overweight with a comorbidity or obese. Arena Pharma has an agreement with Eisai Inc. (ESALY) for the commercialization of Belviq in the US.

We expect investor focus to remain on the launch of Belviq in the US. The US Drug Enforcement Administration (DEA) issued a notice proposing that Belviq should be placed in Schedule IV of the Controlled Substances Act.

As far as the EU is concerned, Arena Pharma has responded to a Day 180 List of Outstanding Issues issued by the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) earlier this year. The CHMP raised objections regarding non-clinical as well as clinical issues including tumors in rats, valvulopathy and psychiatric events. A response from the CHMP should be out in the first half of 2013.

Arena Pharma currently carries a Zacks Rank #3 (Hold). Companies that look more attractive include Cytokinetics Inc. (CYTK - Snapshot Report) and Osiris Therapeutics (OSIR - Analyst Report). Both are Zacks Rank #1 (Strong Buy) stocks.

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