Why Is Arena (ARNA) Up 15.1% Since the Last Earnings Report?

A month has gone by since the last earnings report for Arena Pharmaceuticals, Inc. ARNA. Shares have added about 15.1% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Arena Pharmaceuticals Posts Q1 Loss, Revenues Down

Arena Pharmaceuticals reported loss of $0.09 per share in the first quarter of 2017, same as in the year-ago period but wider than the Zacks Consensus Estimate of a loss of $0.08.

Total revenue in the quarter was $6.6 million, down 32.7% from the year-ago quarter. Revenues included $2.7 million in net product sales of Belviq, $1.5 million in manufacturing support payments from Eisai and $1.1 million in the form of upfront payments from collaborations with Boehringer Ingelheim and Axovant Sciences Ltd. Revenues however beat Zacks Consensus Estimate of $6 million.

Quarter in Detail

During the first quarter of 2017, Belviq sales declined to $2.7 million from $3.5 million a year ago.

Belviq, which has been in the U.S. market since Jun 2013 and was the first obesity drug to be approved by the FDA in over a decade, is yet to impress with its performance. Sales have been lackluster so far and are yet to pick up significantly.

Research & development (R&D) expenses declined 16.2% year over year to $15.5 million. General & administrative (G&A) expenses were $8.2 million, up 17.9% year over year.

The company raised $74.6 million from a public offering of its common stock during the quarter.

Pipeline Update

Arena's pipeline consists of several early- to mid-stage candidates targeting different therapeutic areas. These include ralinepag (pulmonary arterial hypertension), etrasimod (a number of autoimmune diseases) and APD371 (pain and fibrotic diseases). Phase II trials on etrasimod and ralinepag are ongoing. The company expects to report data on etrasimod for ulcerative colitis by 2017-end and on ralinepag for pulmonary arterial hypertension in Jul 2017. Meanwhile, the company is enrolling patients in phase II trial on APD371 for the treatment of pain linked with Crohn's disease and in two phase II trials of etrasimod for dermatological extraintestinal manifestations EIM and pyoderma gangrenosum.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

Arena Pharmaceuticals, Inc. Price and Consensus

 

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

VGM Scores

At this time, Arena's stock has a subpar Growth Score of 'D', while it is doing a bit better on the momentum front with 'C'. The stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable solely for momentum investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.