Sector Update: Health Care Stocks Falling; Arena Pharma Reverses Early Advance Despite Surprise Q2 Profit

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Healthcare stocks were moderately lower Friday with the NYSE Healthcare Sector Index slipping about 0.3% and shares of healthcare companies in the S&P 500 off about 0.5% as a group.

In company news, Arena Pharmaceuticals was lower Friday, giving up early gains that followed the drug-maker today reporting a surprise Q2 profit despite a big year-over-year drop in quarterly revenue although those results also topped Wall Street expectations.

Net income was $7.48 million, or $0.03 per share, down from a $40.1 million profit during the year-ago period but easily beating analyst estimates looking for an $0.11 per share net loss.

Revenue declined 81.4% year over year to $12.8 million but still exceeded the Capital IQ consensus by around $3.63 million. Net sales of the company's Belviq anti-obesity drug reached $3.5 million, or 31.5% of the $9.9 million in overall sales of the drug by the U.S. affiliate of Eisai Co Ltd. ARNA also received around $400,000 from redemptions of a 15-day free trial voucher for Belviq.

ARNA shares were nearly 5% at $4.40 apiece in mid-day trade, just 5 cents above its session low and retreating from an early 4.5% advance to $4.84 a share. The stock has traded in a 52-week range of $4.05 to $7.97 a share, declining slightly less than 35% over the past 12 months.

In other sector news,

(+) TNDM, (+17.1%) Q2 net loss of $0.83 per share was $0.06 smaller than expected. Revenue climbs 85.5% year over year to $10.3 mln, roughly in-line with $10.4 mln consensus. Guides FY14 revenue in-line with $546.76 mln Street view.

(-) BONE, (-29.4%) Prices offering of 1.14 mln shares at $5.70 each, a 19.9% discount to Thursday's closing price. The deal also included warrants to buy up to 571,500 additional shares at $7.12 apiece and generated $5.8 mln in gross proceeds.



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