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Arena Pharmaceuticals (ARNA) Q2 Loss Wider Than Expected

Zacks Equity Research
Updated
Arena Pharmaceuticals (ARNA) Q2 Loss Wider Than Expected
Arena Pharmaceuticals (ARNA) misses second-quarter earnings estimates. Its three key pipeline candidates, ralinepag, etrasimod and Olorinab/APD371, remain in focus.

Arena Pharmaceuticals, Inc. ARNA reported a loss of 65 cents per share for the second quarter of 2018, wider than the Zacks Consensus Estimate of a loss of 62 cents. The year-ago loss was 77 cents per share.

The stock has gained 11.4% so far this year against the industry’s decline of 4.9%.

 

Total revenues in the quarter were $4 million, up 110.4% from the year-ago quarter. Sales beat the Zacks Consensus Estimate of $0.93 million. Revenues include $3.1 million from collaboration revenues and $0.9 million in royalty.

Research & development (R&D) expenses increased 51.6% from the year-ago level to $26.8 million.

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General and administrative (SG&A) expenses were up 45.5% to $10.4 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”), was advanced to phase III development during the quarter. The company initiated a phase III study on the candidate to evaluate time to clinical events outcomes. Two other phase III studies are likely to start by the end of 2018 and early 2019 on the candidate.

Etrasimod is currently being evaluated in a phase II study, evaluating it in primary biliary cholangitis. The company is on track to discuss study design for phase II/III study in Crohn's disease and a phase III study in Ulcerative colitis.

Data from a phase II study (OASIS) on ulcerative colitis, announced in March, demonstrated clinical remission in 33% of the patients on etrasimod versus 8.1% for placebo.

The company has completed enrolment in the phase II study, evaluating olorinab for the treatment of pain associated with Crohn's disease. Data from the study is expected in September 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 Vertex Pharmaceuticals VRTX, Seattle Genetics SGEN and Galapagos NV GLPG. All the stocks sport a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vertex’s earnings per share estimates moved up from $3.16 to $3.79 for 2018 and from $4.33 to $4.58 for 2019 in the last 30 days. The company delivered a positive surprise in three of the trailing four quarters with an average beat of 27.5%. Share price of the company has increased 16.7% in a year.

Seattle Genetics’ 2018 loss per share estimates narrowed from $1.81 to 83 cents and from 81 cents to 39 cents in the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 12.93%. The company’s shares have rallied 32.7% year to date.

Galapagos’ loss estimates narrowed from $3.88 to $3.79 for 2018 and from $3.00 to $2.86 for 2019 over the last 30 days. The company delivered a positive earnings surprise in two of the trailing four quarters, with an average beat of 6.01%. The company’s shares have increased 16.3% so far this year.

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