Stock in Focus: Arena Pharmaceuticals Inc. (ARNA)

Company Profile:

Arena Pharmaceuticals, Inc., a biopharmaceutical company, focuses on providing novel medicines with pharmacology and pharmacokinetics to patients worldwide. Its investigational clinical programs include ralinepag (APD811), which is in Phase III trial to treat pulmonary arterial hypertension; etrasimod (APD334) for ulcerative colitis, and Crohn’s disease, as well as for atopic dermatitis and other indications; and Olorinab (APD371), which is in Phase II trial for the treatment of gastrointestinal pain. It is also developing APD418, a calcium-independent myofilament derepressor for the treatment of decompensated heart failure. The company has collaboration agreements with United Therapeutics Corporation; Everest Medicines Limited; Axovant Sciences GmbH; Outpost Medicine LLC; CY Biotech Company Limited; Boehringer Ingelheim International GmbH; Eisai Co., Ltd.; and Eisai Inc. Arena Pharmaceuticals, Inc. was founded in 1997 and is based in San Diego, California.

Recent News:

On Jan. 16, 2020, the U.S. Food and Drug Administration (FDA) granted Fast Track designation for APD418, a β3-adrenergic receptor (AdrR) antagonist and cardiac myotrope, in development for the treatment of decompensated heart failure (DHF).

On Jan. 13, 2020, the company announced the appointment of Joan Schmidt as Executive Vice President, General Counsel and Secretary. Ms. Schmidt will join Arena formally in March 2020 and report to Amit D. Munshi, Arena’s President and Chief Executive Officer.

For the third quarter ended September 30, 2019, the company reported revenues totaled $1.4 million, primarily consisting of $0.8 million of royalty revenue. Research and development expenses totaled $60.3 million, including $6.7 million related to non-cash share-based compensation.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

@@@@@

Profitability – Measures the historical price movement of the stock.

@@@@@

Solvency – Measures the solvency of the company based on several ratios.

@@@@@

Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

@@@@@

Conclusion:

ARNA’s strengths can be seen in its strong growth and better profitability compared with its peers. Technical indicators signal the bullish signs, as there is a bullish crossover in Stochastic oscillator, MACD is trying to cross back up and the RSI stands at 50.99 with positive bias. We rate Arena Pharmaceuticals Inc. (ARNA) a STRONG BUY.