Arena Pharmaceuticals, Inc.
) earnings (excluding special items) of 17 cents per share in the
second quarter of 2013 were higher than the breakeven earnings
reported a year ago. Second quarter earnings also beat the Zacks
Consensus Estimate of 13 cents.
Arena Pharma recorded second quarter revenues of $68.9
million, a massive increase of 213% from the year-ago period,
thanks to a $65 million milestone payment received from partner
Eisai related to Belviq.
In Jun 2013, Arena Pharma launched its obesity drug, Belviq,
in the U.S. Second quarter results reflect the first three weeks
of Belviq sales after its launch with Arena Pharma recording
Belviq sales of $1.3 million. About 12,500 prescriptions for
Belviq were written until Jul 19.
The company's revenues were well above the Zacks Consensus
Estimate of $48 million. During the reported quarter, the company
received a $0.5 million milestone payment from Eisai for the New
Drug Submission in Canada for Belviq.
Research and development (R&D) and general and
administrative (G&A) expenses were up 33.3% to $18.8 million
and 65.4% to $8.6 million during the reported quarter,
Arena Pharma expects R&D spend of $70 million to $78
million and G&A spend of $28 million to $34 million in
Arena Pharma's commitment for expanding the market reach of
Belviq was evident in the quarter through strategic
collaborations with local established players in countries
outside the U.S.
In Jul 2013, Arena Pharma entered into an agreement with
Taiwan-based CY Biotech for the marketing and supply agreement of
Belviq in Taiwan.
The obesity market represents huge commercial potential.
According to the World Health Organization (WHO), the worldwide
obese population has almost doubled since 1980. Furthermore, 1.5
billion people around the globe are overweight with 500 million
falling under the obese category.
We note that the company is also evaluating Belviq for
additional indications and its administration with other agents
such as appetite suppressant, phentermine.
We are encouraged by the company's efforts to develop its
pipeline along with the expansion of the Belviq label. During the
reported quarter, the company progressed on its pipeline
candidates, APD811, APD334 and temanogrel, which are being
developed for indications other than obesity.
Currently, Arena Pharma carries a Zacks Rank #3 (Hold).
Biopharma stocks which look attractive include
) with a Zacks Rank #1 (Strong Buy), and
Jazz Pharmaceuticals Public Limited Company
) with a Zacks Rank #2 (Buy).
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