Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) released second-quarter results and hosted a quarterly call, where management provided a corporate update as well as an update on clinical progress. In reaction, Needham analyst Alan Carr weighs in on ARNA, maintaining a Hold rating, without providing a price target.

New Arena CEO Amit Munshi has executed a plan to restructure the firm since his appointment in May, a plan that includes a shift in strategy. Instead of focusing on discovery research and lorcaserin life cycle management, Arena instead will be zoning efforts on the three clinical stage programs the drug maker has in the works.

First, Arena has engineered Etrasimod, an orally available S1P1 receptor modulator with therapeutic potential in autoimmune diseases such as ulcerative colitis (UC). Second, Ralinepag is an orally available agonist of the prostacyclin (IP) receptor designed to treat vasospastic diseases, such as Pulmonary Arterial Hypertension (PAH). Third, Arena has created APD371, an orally available agonist of the CB2 receptor with potential for pain relief without risk for dependence or abuse.

Carr notes that Phase 2 trials of Ralinepag in PAH and Etrasimod in UC have proven to be challenging when it comes to patient enrollment. Meanwhile, phase 2 trial of APD371 in pain associated with Crohn’s disease is due early next year. The analyst found Phase 1 safety data encouraging.

Ultimately, for Carr, “Preclinical and early clinical data suggest that these programs may be differentiated, although we await confirmation from proof-of-concept Phase 2 trials. Results from ongoing Phase 2 trial of ralinepag in Pulmonary Arterial Hypertension are expected mid-2017 (was 2Q17) and etrasimod in Ulcerative Colitis in 4Q17 (was 2Q17) […] We believe planned allocation of resources is appropriate, but note extended timeline to trial results.”

According to TipRanks, five-star analyst Alan Carr is ranked #231 out of 4,105 analysts. Carr has a 46% success rate and earns 11.0% in his average returns.

TipRanks analytics show ARNA as a Buy. Based on 2 analysts polled by TipRanks in the last 3 months, 1 rates a Buy while 1 maintains a Hold.

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