Arena Shares Plunge after Disappointing First Quarter Results
Arena Pharmaceuticals Inc. said Thursday that its loss narrowed in the first quarter, though company executives said they are still waiting for a federal decision on the status of the weight loss drug Belviq.
The Food and Drug Administration approved Belviq on June 27, but the drug has not gone on sale yet. The Drug Enforcement Administration is proposing that Belviq be classified as a Schedule IV controlled substance, which means it has a relatively low potential for abuse. Arena and its partner Eisai Co. can't start marketing Belviq until that classification is approved. It's not clear when that will happen.
"We look forward to the completion of Belviq's scheduling designation in the United States, and we are focused on making this new treatment option available to patients in additional parts of the world," said Jack Lief, Arena's president and CEO.
Company shares fell $1.27, or 15.1 percent, to $7.13 in after-hours trading. The stock closed earlier in the day up 2 percent to $8.40.
Belviq, or lorcaserin, is designed to stimulate serotonin receptors in the brain linked with feelings of satiety, leading patients to feel full. It was one of two new prescription weight loss drugs approved by the FDA last year, along with Vivus' Qsyimia. That drug went on sale in September. The FDA hadn't previously approved a new weight-loss prescription since 1999.
Arena said it lost $18.9 million, or 9 cents per share, compared with $29.4 million, or 18 cents per share, a year earlier. Arena sold more than 70 million new shares of stock in 2012, which is reflected in the per-share results of the last quarter.
Revenue edged up to $2.37 million from $2.2 million. The company posted $500,000 from a milestone payment from Eisai for filing Belviq for approval in Mexico.
Analysts polled by FactSet expected earnings of 20 cents per share on revenue of $68.3 million. On average, analysts expected the company to record $67.2 million in milestone payments tied to the launch of Belviq, according to FactSet. Arena is scheduled to receive payments after Belviq is scheduled by DEA regulators and inventory ships to its partner Eisai.