Arena Pharmaceuticals Inc.'s
) loss (excluding special items) of 10 cents per share in the
fourth quarter of 2012 was narrower than the year-ago loss of 16
cents per share. The Zacks Consensus Estimate was a loss of
2 cents per share.
Arena Pharma recorded fourth quarter revenues of $1.9 million,
down 6.7% from the year-ago period, and well below the Zacks
Consensus Estimate of $26 million.
Full year loss came in at 45 cents per share, narrower than
the year-ago loss by 43.8%. The Zacks Consensus Estimate for the
full year was a loss of 36 cents per share. Revenues for the full
year came in at $27.6 million as against revenues of $12.7
million in 2011. Full year revenues were also below the Zacks
Consensus Estimate of $52 million.
Research and development expenses increased 6.5% to $13.9
million. General and administrative expenses increased 38.3% to
$7.3 million. Higher share based compensation and personnel costs
led to the increase.
Arena Pharma expects to receive revenues of $65 million from
Eisai Co., Ltd
) as milestone payments. In addition to this, Arena Pharma
expects to receive approximately $6 million from collaborators as
amortization of upfront payments. Another $3 million is expected
from Siegfried for manufacturing services. An additional
regulatory milestone payment of $1.5 million from Eisai is also
The company expects a milestone payment of $500,000 for every
regulatory submission of Belviq in Mexico, Canada and Brazil from
Arena Pharma expects research and development expenses in the
range of $70−$78 million. General and administrative expenses are
expected in the range of $28−$34 million.
Meanwhile, a response regarding the regulatory status of
Belviq in the EU should be out in the first half of 2013. Arena
Pharma is also working with Eisai to submit regulatory
applications for the drug in Canada, Mexico and Brazil.
We expect investor focus to remain on the launch of Belviq in
the US. The US Drug Enforcement Administration (DEA) issued a
notice proposing that Belviq should be placed in Schedule IV of
the Controlled Substances Act.
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. However, we
remind investors that companies like
) have a presence in the obesity market.
Currently, Arena Pharma carries a Zacks Rank #3 (Hold).
Comparatively other biopharma stocks like
Celldex Therapeutics, Inc.
) look better positioned carrying a Zacks Rank #2 (Buy).
ARENA PHARMA (ARNA): Free Stock Analysis
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