Arena Posts Worse-Than-Feared Quarterly Loss As Sales Disappoint

Arena Pharmaceuticals posted a wider-than-expected loss in the fourth quarter, as the biopharmaceutical company’s sales were almost negligible. Shares declined about 2.7% to close at $76.56 on Feb. 23.

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However, Arena (ARNA) achieved a strong liquidity position and maintained pipeline progress. The company incurred a loss of $2.10 per share in 4Q, compared to the $1.85 loss per share estimated by analysts. Total sales generated in the quarter amounted to $37,000, falling short of analysts’ expectations of $560,000.

Arena’s research and development (R&D) expenses came in at $100.4 million in the quarter, up 34.6% year-over-year. Selling, general and administrative (SG&A) expenses were $34.9 million, up 57.2%.

Arena CEO Amit D. Munshi said, “This quarter we were pleased to announce the completion of enrollment of the ELEVATE UC 52 trial for etrasimod and expansion of our cardiovascular franchise to include temanogrel.”

“Our growing and diverse pipeline is supported by a strong cash position,” he added. (See Arena stock analysis on TipRanks)

Following the 4Q results, JonesTrading analyst Prakhar Agrawal reiterated a Buy rating and a price target of $101 (31.9% upside potential) on the stock. The analyst said, “There was no material update in 4Q.”

Additionally, Agrawal believes “investor focus is on the imminent readout for Olorinab in IBS-pain (CAPTIVATE).”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 Buys. The average analyst price target of $95.50 implies almost 25% upside potential to current levels. Shares have increased more than 14% over the past six months.