Arena Pharmaceuticals Inc.’s (ARNA - Analyst Report) loss (excluding special items) of 10 cents per share in the first quarter of 2013 was narrower than the year-ago loss of 15 cents per share. The Zacks Consensus Estimate hinted at earnings of 11 cents per share.
Arena Pharma recorded first quarter revenues of $2.4 million, up 8.4% from the year-ago period. The company’s first quarter revenues were well below the Zacks Consensus Estimate of $50 million. Arena Pharma’s revenues during the quarter comprised of revenues from manufacturing services and collaborative agreements.
During the reported quarter, the company received a $0.5 million milestone payment from Eisai Co. Ltd (ESALY - Snapshot Report) for the submission of Marketing Authorization Application (MAA) for Belviq in Mexico. Arena Pharma is also eligible to receive payments based on Eisai’s net sales of Belviq.
Research and development expenses were down 3.2% to $14 million. However, Arena Pharma’s general and administrative expenses increased 14.1% to $7.3 million during the reported quarter. Higher salaries, patent fees and auditing fees led to the increase in general and administrative expenses.
We remind investors that on Jun 27, 2012, Belviq was approved by the US Food and Drug Administration (FDA) as an adjunct to a healthy diet (low on calories) and increased physical activity for chronic weight management in obese or overweight.
The US Drug Enforcement Administration (DEA) had earlier issued a notice proposing that Belviq should be placed in Schedule IV of the Controlled Substances Act. The DEA is currently conducting the final scheduling of Belviq. The drug is expected to be available in the US following the completion of scheduling.
Meanwhile, the company decided to withdraw its MAA for Belviq in the EU. The Committee for Medicinal Products for Human Use (CHMP), European Medicines Agency’s (EMA) advisory body, believes that the results of nonclinical studies were not sufficient for the drug’s approval. The company intends to submit the application at a later date.
Apart from the US and the EU, Arena Pharma has also filed regulatory applications for Belviq in Switzerland. Moreover, the company expects to file regulatory filings for the drug in Canada, Brazil and South Korea as well by the end of this year.
Currently, Arena Pharma carries a Zacks Rank #3 (Hold). Comparatively other biopharma stocks like Incyte Corporation (INCY - Analyst Report) and Medivation Inc. (MDVN - Analyst Report) look better positioned carrying a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively.