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Arena Pharmaceuticals (ARNA) Q1 Loss Wider Than Expected

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Arena Pharmaceuticals, Inc. (ARNA - Free Report) reported a loss of 78 cents per share for the first quarter of 2018, wider than the Zacks Consensus Estimate of a loss of 70 cents. The year-ago loss was 90 cents per share.

Following the earnings release, Arena’s shares were down almost 3% on Tuesday. However, the stock has outperformed the industry so far this year. While shares of the company have gained 23.7%, the industry witnessed a decline of 11.9%.

Total revenues in the quarter were $1.76 million, up 5.7% from the year-ago quarter. Sales also beat the Zacks Consensus Estimate of $1 million. Revenues include $1 million from collaboration revenues and $0.7 million in royalty revenues from Japanese pharma company Eisai based upon Eisai’s sales of obesity drug Belviq to its distributors.

Research & development (R&D) expenses increased 40.6% from the year-ago level to $21.6 million.

General and administrative (SG&A) expenses were also up 48.2% to $11.2 million in the quarter.

Pipeline Update

Arena’s pipeline comprises three key candidates - ralinepag (vascular diseases), etrasimod (APD334; autoimmune diseases) and Olorinab/APD371 (pain and fibrotic diseases).

Ralinepag, which is being developed for the treatment of pulmonary arterial hypertension (PAH), is currently in a phase II study. The company expects to start two standalone phase III registrational studies on the candidate in the second half of 2018 for the given indication.

Etrasimod is currently being evaluated in multiple phase II studies. Data from a phase II study (OASIS) on ulcerative colitis (UC) was announced in March.

The study met primary and all secondary endpoints with statistical significance for patients receiving 2 mg dose of etrasimod for 12 weeks. Clinical remission (“CR”) was achieved in 33% of the patients on etrasimod versus 8.1% for placebo based on the three-component Mayo Clinic Scale.  Moreover, 41.8% of the patients achieved endoscopic improvement compared to 17.8% for placebo.  The candidate achieved CR in 24.5% of the patients compared with 6% for placebo based on a four-point Mayo Clinic Scale. Based on these data, Arena is planning to initiate a phase III program for further development of etrasimod for the treatment of UC.

The company is also enrolling patients in a phase II study of etrasimod for primary biliary cholangitis while a development plan is underway for etrasimod for Crohn's disease.

Olorinab is being evaluated in a phase II study for the treatment of pain associated with Crohn's disease. Data from the study is expected in the third quarter of 2018.

Arena Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

 

Arena Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Arena Pharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

Arena Pharmaceuticals currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Exelixis, Inc. (EXEL - Free Report) , Ligand Pharmaceuticals (LGND - Free Report) , and Protagonist Therapeutics (PTGX - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelixis’ earnings per share estimates for 2018 increased 50% over the past 60 days. Exelixis earnings have surpassed expectations in the three of the trailing four quarters, with an average beat of 130.73%.

Ligand’s 2018 earnings per share estimates increased 5.5% in the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.88%. The company’s shares have rallied 14.9% year to date.

Protagonist Therapeutics’ loss estimates narrowed 49% for 2018 and 37% for 2019 over the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.95%.

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