Arena (ARNA) Expands Strategic Deal With Beacon Discovery

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) and privately-held Beacon Discovery entered into strategic multi-year partnership, which is named Project Cabrillo, to develop novel therapies targeting G protein-coupled receptors (“GPCR”) to treat immune and inflammatory indications.

Per the terms of the deal, while Beacon will be responsible for drug discovery using its proprietary GPCR discovery platform, Arena will develop and commercialize promising novel compounds as a treatment for a variety of immune and inflammatory diseases. The financial details related to the deal have not been disclosed.

Please note that Arena has several agreements with Beacon related to clinical developments and other business activities. The new deal between the companies expands their strategic relationship.

Arena’s shares have gained 12.9% in the past year compared with the industry’s increase of 3.8%.

Arena’s pipeline currently consists of two key candidates, namely etrasimod (autoimmune diseases) and olorinab (pain and fibrotic diseases).

In June, Arena dosed the first patient in the pivotal phase III ELEVATE UC 52 study, evaluating etrasimod for treating moderately-to-severely active ulcerative colitis. The company initiated dosing in the phase IIb ADVISE study to evaluate the candidate for atopic dermatitis in October. It is planning to start a phase IIb/III CULTIVATE study for treating patients with Crohn's disease.

A phase II CAPTIVATE study is evaluating olonarib as a treatment for abdominal pain associated with irritable bowel syndrome.

We would like to remind investors that in January 2019, Arena out-licensed the global rights to its pulmonary arterial hypertension candidate ralinepag to United Therapeutics, Inc. (NASDAQ:UTHR) .

The expanded relationship with Beacon will likely boost Arena’s pipeline targeting auto-immune diseases.

Zacks Rank & Stocks to Consider

Arena currently carries a Zacks Rank #4 (Sell).

A couple of better-ranked stocks to consider from the biotech sector are Coherus BioSciences, Inc. (NASDAQ:CHRS) and Agenus Inc. (NASDAQ:AGEN) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Coherus’ earnings estimates increased from $1.25 to $1.67 for 2020 over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, the average beat being 149.94%. Shares of the company have gained 111.3% in the past year.

Agenus’ loss estimates have narrowed from $1.63 to $1.41 for 2020 over the past 60 days. The company delivered a positive earnings surprise in two of the trailing four quarters, the average beat being 23.79%. Share price of the company has increased 36.1% in the past year.

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