Arena Pharmaceuticals (ARNA) was up as much as 40% on Wednesday with the release of phase I data for APD334, a product the company is positioning for phase II trials in autoimmune disorders. Investors are jumping into ARNA because another publicly traded drug developer, Receptos’ (RCPT), has reported impressive results for a similar drug in multiple sclerosis (MS) and ulcerative colitis (UC), and Novartis’ (NVS) S1PR modulator, Gilenya (fingolomid), did $1.2 billiion in its 2nd full year on the market. Receptos is a $3.4 billion company, while Arena’s valuation is just under $800 million.
APD334 is a modulator of the sphingosine 1-phosphate 1 receptor (S1P1R), as is Receptos’ RPC1063. In October of last year, Receptos reported positive results from the phase II TOUCHSTONE trial, testing RPC1063 in UC. RCPT has doubled in the time since.
The S1P1 receptor is expressed on white blood cells, and studies suggest that its modulation can prevent the trafficking of lymphocytes to areas of disease inflammation, the underlying cause of many autoimmune diseases. In Arena’s phase Ib clinical trial, APD334 demonstrated a dose-dependent effect on lymphocyte counts in blood, with average decreases from baseline of up to 69%. According to Arena, lymphocyte counts recovered to baseline within a week of stopping the drug. In five different dosing cohorts, a 50 healthy volunteers received APD334 and 10 received placebo for 21 days.
In October, Receptos reported that 16.4% of patients on a 1 mg dose of RPC1063, as compared to 6.2% of patients on placebo, achieved clinical remission at week 8 (by Mayo score) (p < 0.05). 13.8% of patients on a 0.5 mg dose achieved clinical remission. Additionally, 58.2% of patients on the 1 mg dose of RPC1063 achieved clinical response, compared to 36.9% of patients on placebo (p < 0.05).
ARNA has lagged in the last two years, down 60% since mid-2012 as sales of its weght-loss drug, BELVIQ, have failed to impress. With the stock depressed and investors looking for something new to like at Arena, the stock amy continue to have legs into its presentation next Wednesday at the 33rd Annual J.P. Morgan Healthcare Conference in San Francisco.
One or more of PropThink’s contributors are long ARNA or RCPT.
