Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) reported financial results for the second quarter ended June 30, 2016, and provided a corporate update.
“We are continuing to successfully execute the turnaround and transition of Arena from a historically research-oriented organization to a high performing clinical development organization focused on maximizing the value of our assets – this includes re-orienting priorities, building requisite capabilities and establishing key linkages to the physician community,” said Amit Munshi, Arena’s President and CEO. “With our three proprietary clinical programs, we are committed to developing our pipeline in a time and cost conscious manner to deliver first, or best-in-class, compounds. Our strong quarter-end cash position of$122.0 million in addition to the workforce reductions supports the advancement of our clinical stage programs.”
“In addition to our on-going Phase 2 programs for etrasimod and ralinepag, we are excited to announce that APD371 will be evaluated in a Phase 2 program for the treatment of pain associated with Crohn’s disease, which we expect to initiate early in 2017. We are working to unlock the value in our portfolio, including these three Phase 2 programs, as well as supporting our multiple collaborations which span a marketed product, a Phase 2 program, a Phase 1 program and a preclinical program,” Munshi concluded.
- Etrasimod (APD334)
- Etrasimod is currently being evaluated in a Phase 2 clinical trial for ulcerative colitis.
- The Company expects Phase 2 data in the fourth quarter of 2017.
- The United States Adopted Names (USAN) Council has approved the nonproprietary name etrasimod for APD334.
- Favorable results were reported in April from a Phase 1b multiple-ascending dose clinical trial of APD371, a highly selective and full agonist of the cannabinoid 2 (CB2) receptor.
- APD371 will next be evaluated in a Phase 2 clinical trial for the treatment of pain associated with Crohn’s disease. The Company anticipates initiating the trial in early 2017.
- Ralinepag (APD811)
- Ralinepag is currently being evaluated in a Phase 2 clinical trial for pulmonary arterial hypertension (PAH).
- The Company expects Phase 2 data mid-year 2017.
- Eisai, Ltd. and Eisai Inc.
- In connection with two regulatory approvals subsequent to the second quarter, Arena will receive$11.0 million in milestone payments from Eisai:
- On July 14, we announced the Federal Commission for the Protection Against Sanitary Risk(COFEPRIS) approved lorcaserin HCl in Mexico. The product will be sold under the brand name VENESPRI®.
- On July 19, we announced the U.S. Food and Drug Administration (FDA) approved the New Drug Application (NDA) for BELVIQ XR® (lorcaserin HCl) CIV extended-release 20 mg tablets.
- Kevin R. Lind appointed as Executive Vice President and Chief Financial Officer, effective June 15, 2016.
- U.S. workforce reduction announced, primarily in the areas of discovery research, manufacturing and administrative functions to focus the organization on its proprietary clinical pipeline. The Company estimates a reduced annualized cash expenditure of approximately $23-$25 million. In July, the Company also reduced the workforce in Arena GmbH, primarily in the areas of manufacturing and G&A. The Company estimates this will result in an additional reduced annual cash expenditure of approximately $2.1 million.
Second Quarter 2016 Financial Results
- Revenues totaled $9.5 million, including $4.3 million in net product sales of BELVIQ
- Research and development expenses totaled $18.5 million
- General and administrative expenses totaled $8.5 million
- Restructuring charges totaled $6.1 million, including non-cash charges of $1.0 million
- Net loss was $27.2 million or $0.11 per share
- At June 30, 2016, cash and cash equivalents totaled $122.0 million and approximately 243 million shares of Arena common stock were outstanding
2016 Corporate Guidance Update
- R&D expenses between $78 to $84 million, including non-cash expenses of approximately $9 million
- G&A expenses between $27 to $33 million, including non-cash expenses of approximately $7 million
- The Company believes the costs reductions and strategic shift in priorities will allow it to manage its cash through completion of Phase 2 clinical trials for its three internal clinical stage programs. (Original Source)
Shares of Arena Pharmaceuticals are down nearly 3% to $1.63 in after-hours trading. ARNA has a 1-year high of $3.64 and a 1-year low of $1.30. The stock’s 50-day moving average is $1.71 and its 200-day moving average is $1.70.
On the ratings front, Wells Fargo analyst Jim Birchenough reiterated a Hold rating on ARNA, in a report issued on May 10. According to TipRanks.com, Birchenough has a yearly average return of 20.7%, a 53.6% success rate, and is ranked #78 out of 4102 analysts.
Arena Pharmaceuticals, Inc. is a biopharmaceutical company engages in the discovery, development, and commercialization of novel drugs that target G protien-coupled receptors. It offers a range of drugs for treatment in the field of cardiovascular, central nervous system, inflammatory, and metabolic diseases.