ARNA - Earnings call transcript Q3 2017 | Arena Pharmaceuticals Inc

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Operator

Good day everyone, and welcome to Arena Pharmaceuticals' Third Quarter 2017 Financial Results and Corporate Update Conference Call. This call is being recorded. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session, instructions will be provided at that time for you to queue up for questions. I would now turn the call over to Kevin Lind, Chief Financial Officer of Arena. ahead. go Please

Kevin Lind

results and hope everyone, news for us our joining we XXXX. quarter Good had thank a We financial announcing afternoon you earlier the the chance today. third issued of afternoon this you for to release review

today's Officer. me Chief on our and is call Joining Munshi, Amit President Executive

trials, other with new filings are statements are not including that of collaborative recruitment risks results goals, which R&D, www.sec.gov the the at like other and of SEC uncertainties our can available the competitive may and our maintaining we timing in further to candidates statements and take about and include in patient including the ongoing statements I'd These drug begin, our and that strategy, we US the that found planned are and as regulatory data amount not be than or related uncertainties, clinical project, and to and remind the challenging allocation for be activities discussed you of drugs we'll approval and focus, and risks commercialization, or Securities plans, the make regulatory and recruitment trials historical and and Before website financial may sufficient to and made trials is regulatory context development, forward-looking regarding key Commission, expectations, programs, expected statements for timing on involving personnel. risks resources, related longer our activities facts. Exchange decisions,

statements. materially results may forward-looking differ actual Our our from

turn Now to over to Amit. I'd like the call

Amit Munshi

thanks and everyone, joining afternoon call. our Good Kevin. Thanks, for

advance multiple as pipeline, provide promising we will product I continue and team today, programs. comments corporate my development updates our to During

the focus with an important provide cleanup of ulcerative business and conclude well milestones, aspects all time look to executing quarter Pulmonary to a catalyst on continue forward APDXXX for over exciting will plans of and and be for several upcoming on expected This questions. the quarters. clinical Kevin as issues next important meeting We FDA we'll third colitis on continues pain as the with as phase or Arena deliver expected review in Crohn's to this, in we X associated Following across in by disease. taking XXXX, financial phase X our readout may data PAH, Hypertension ralinepag etrasimod our for and Arterial including our legacy for

and We Lewy reported cancer sleep read-outs from partner with also body and our behavior data visual Axovant in important Sciences dementia REM hallucinations [neural] disorder.

ralinepag results July receptor potential we a our and agonist a So let phase from ralinepag, believe We topline X with oral best-in-class potency two be to positive delivered on study treatment with me pharmacokenitics. of has in strong, ralinepag improved start groups of for PAH. markedly IP the

late this we aware abstract you last [abchest]. be presented week As data might breaking in a little

As a phase discuss for to we elements requested of milestone the with have FDA for program. key us, the X a planning meeting

as X platform. Given are phase its ralinepag IV-like program in comprehensive potential, drug single therapeutic we unlock and just oral phase order to not a a plan a that with the full exposure X developing as first value contemplates

to product, event such where and priorities current of ralinepag time on is we world. around the as label, for time on are; the to the it primary market our the the to acceptable to for on course allows scope As regulatory balancing design of to program and objective we finally, forward and physician and move fully direct benefits deliver various which that intend in agencies We category. illuminated market, have we for products broad are of four that focused with experience these ralinepag breadth the the comparison

European and of of parameters in process publicly and registries European dataset, better value of phase details to disease working forward on to our of X natural We tasks program as our best the progress existing a phase the updating risk look further analysis US course on US you appropriate. FDA forward. and are experts with on X with the reform providing from substantial conducting the the available We and and course on data our

with believe and pharmacokinetics Now to turn attention potential SXP receptor utility activity, be to best-in-class its etrasimod. its my best-in-class safety I’d like to is SXP due compelling to for a specificity the high the superior and its PKPD We pharmacodynamics drug candidate this potential clinical profile. subtype modulator expanded

excited identifying in promise XXX,XXX literature pieces this of where in generation over various focus that there XX,XXX to We reviewed was SXP viable incredibly and over screen. the then The are about commercially regulatory SXP was commercial key We involved applied indications XX is diseases over recently scientific development of takeaway next that SXP implicated class. indications. and

time. important pharmacology pharmacokinetics, potential auto-immune Given that as the We’ve study this a potential today. The in broad we patients To of the are trial announce enrolled in utility step The to compound a on be has is ongoing few to ulcerative additional formally randomized. enrolment such concludes clinical the etrasimod’s may and believe pleased our optimized of the November with colitis receptor milestone every end X there phase an on in program. as patients XXX numerous and ideal next etrasimod we evaluating X broad conditions deliver study.

Mayo course dose tolerability dose this on endpoints sites point versus with X of the including of a sub-score patients placebo bleeding. response. and study randomized severe partial group using reminder, We globally. controlled conducted ranging Mayo X ulcerative mucosal a placebo X that being endoscopic parallel double-blind response [dose] to is number of moderate healing to a safety includes enroll As determine at colitis score and and to a score, remission proven and rectal Efficacy

data trial, phase this XXXX. readout we on For a in remain X QX track ulcerative for colitis

determine Following for next the etrasimod will development our plan. this step clinical we appropriate

for the Biliary or to on previously initiating that to share PBC we indications, Cholangitis goal trial Moving Primary other our met as have of pleased are we stated.

in that SXPX has disease cornerstone accumulate in treatment immediate phosphate of liver lymphocytes unmet is disease ducts. resulting levels destruction open reduction believe reminder, and as significant The a the baseline. view a a alkaline serve escalation. As bile study having need We dose of liver will this PBC. for PBC a where acute lymphocytes primary with be The PBC endpoint efficacy label change potential as in study, be from to will a chronic

We will stiffness will course And endpoints as and pharmacokinetics inflammatory tolerability life. be and pharmacodynamics, liver biliary we also monitoring of function, of safety liver explore of progresses. patient additional and quality including measure and and study the markers

initiated indications, color March. manifestation on dermatologic forward We previously move as program. to we Continuing and the intestinal trials IBD PG in will have more this on of extra we other provide the also etrasimod The patients. patients continuing PG study the in study trial; intestinal however to and extra We’ve with manifestation is includes IBD. also EIM UC patients of ongoing enroll enrolled

a patients. and assess and we on value to a consequence these in EIM may the these are we benefits dataset to These additional important future indications continue number trial time-to-market, of of standalone full to accelerate trials impact aspects explore patients our a trial. as EIM intend of two between which strategy longer potentially combined The vast no therapeutic a of optimize etrasimod, to needs trials. provide etrasimod our As the therefore

our full restricted, to the highly on receptor. peripherally moving APDXXX, to selective, agonist So CBX

XXXX. one at unmet pain Approximately As eight as in the there treatment to is APDXXX with opioid with an is continuing initial with Crohn’s an of continuing, need the focus be topline on significant trial visceral QX discussed previously, highlighted study associated area. The treated therapeutic the health intend may chronically deliver we we is important believe patients enroll pain emergency. in disease to in in with this public is opioids. data and IBD

of Senior Cabell and President, delighted Chris that Account Operations leadership we a was Vice faculty Christopher as Dr. has cardiology was QuintilesIMS. Duke. Dr. a to the team and at Head corporate group announce trained joined team on on recently as few the Vice at to is most as Duke Senior Moving Management Clinical far Arena’s Sales, US issues, the President, Cabell Development. concerned, in are Canada,

our strategic to important at evolution. expertise We to have join our are clinical this in operational someone this with and team excited time

Finally, that action total members to in approval to pay prejudice since with and class exchange important and stipulation a that’s at settlement agreed their remain action regarding to terms consolidated and update X, by of continue we attorney members XXXX, the and would legacy and claims as to common have agreement of security shares and class issues Court ongoing November plaintiff insurers XX.XXX for terms we stipulation of and attorney the litigation we District we of stipulation the our at On and class lead will stock class approximately cash class by like conditions. or reconcile dismissal resolve XXXX. will the been a all Arena members their million you action. signed XX.XXX the release Under pay our the of the class of The of settlement subject in million or the election. other either consolidated the

reflects in as reconfine on represents Arena closure our efforts an continued with it pleased are issue this legacy pipeline. important resolution our We the of and promising the to context

financial call review. the let our Kevin over me that for with So to turn

Kevin Lind

Thank you Amit.

XX.X revenue in from payments Our the royalty here. million X.X our expense million support approximately administrative or all equivalents approximately September Boehringer provide detailed and brief in in Arena XXX development and will financial totaled Revenues July million million quarter had cash X a XXX.X and Research results as per includes Axovant from million, loss a approximately we X.X manufacturing common I and are release. XX, totaled X.X XXXX of the share. At in litigation and million of proceeds a million selling million expenses net press discussed X.X Ingelheim million, of Amit BELVIQ, settlement million of totaled million financial results the This which product Eisai, through were review XX.X received of third financing in discussed and expenses sales and including $X.X totaled XX.XXX for of just issuing cash million, general outstanding. net and shares $X.XX shares. XX.X collaborations. stock resulted net

top the equity Amit? the our current for and of existing and offering, participation new thankful validation as our participated institutional strategy. tier investors are view public in support We who from their

Amit Munshi

first multiple us, turn begin now to these the value and XXXX utility creating FDA agent. Thanks of pharmacology both discussions ahead well planning grow APDXXX. busy the phase and believe Q&A promise focus broadly to We the as on the over the has continue with as We for the a optimized same We to on as be best-in-class to Kevin. of on will company. with X focused striving look remain development I compounds at our to time forward operator sessions. ralinepag, with strong etrasimod summary of remains call product our their deliver potential Arena’s receptor and In opportunities. Operator. broad while the the clinical a

Operator

Leerink [Operator And the our Joseph from first Instructions] of from question Partners. line comes Schwartz

Your open. line is

Joseph Schwartz

then first I is on one My have on ralinepag question and etrasimod.

of will for ralinepag? terms the of us discuss do market, first you’ll market the and time on the have the do to order to in you development FDA future So path in and be various with meeting all options you think attracting you the attributes like when that terms mentioned ralinepag, your of how to What cost impact? you proposing look of

Amit Munshi

is we response waiting the agency of are up and timing The to so them. back from calendar, the their meeting a for really

you So on that. I any context can’t give

of or about how rare you Joe in business In an used or It’s PAH. and we – are qualities this as in the has product car to is, terms really think a potentially has know that about to not an that to a chance as have even asset occurrence of and standard an in this I be a this but thinking and. ralinepag

or we the for to as stance, an me [and]. label, market and very either not it’s between So buy an a taking quick consequence bold a are it’s time and

address the four that So a each key we attributes. of expect you’d priorities one four out, program laid would those

Joseph Schwartz

progression disease one on like walk six and based you for have. and is or of following term be something minute patient’s So would accelerated might an approval metrics possible survival that longer the cause that other scenarios

Amit Munshi

think about than is priorities, one in definitely four broader of label. you from there if to is to others. exercise Yeah, study more about terms time get to then market the moving the the thinking potential than market, considerations a outcomes explaining way capacity it And of based maybe where

series we hands are experience, we Now who today. utilize the whether that’s study comparative to very or want there, willing have this direct comment the one study get impact that’s they that’s a firmly the would as have two experimentation. sure establish. those help important the potential And you sure of be this And moving from around in will the true product head-to-head chance you make a to smaller we think this a think clinical as product and illness. making that world, of to trials this of We can not grievous of make many part in about potentially We finally expect to agent. best-in-class types category, believe treat then transition that physicians

So are to bold again stance program. totality provide get the read the as the agency we’ll we on very a some soon and of taking initial as greater continue we color from

Joseph Schwartz

itself how then others distinguish hit the this how where there who and to UC, your indication. other SXP going you this words, And best-in-class hope and is are for here? modulator for etrasimod boogie versus approach the does would differentiate In

Amit Munshi

Sure.

as we that thing through context. a this applicability We that we across is utility category has indications broad product has those don’t the important that’s explore that think in potential this that to want clinical a first a think and think said purpose go product; fit as as is we emphasize XXXX. and IBD super we we’ll for continue The broad to SXP XX% we

colitis Of partial score score are variable. male at space readout course a course first X ulcerative those data and partial is and of our bleedings data endostatic of point is readout continuous our points data on, male the still primary in a and frequently it’s measurements rectal and looking

compared We’re to a placebo. change from looking baseline for

calculations will effect, a some male but the in in the of look any of at products partial you of to think category, sense kind [talent] haven’t the response we’d give magnitude read-outs it and I in provided expect you any we if see. will So you the comparative see publications there magnitude and score

receptor looking at the excited profile given pharmacology. the we’re compound, selective about safety So of the highly

have the baseline (inaudible). faster of day three, in recovery by the products a any terms product of and recovery see the below FX to on-time have of We we we in (inaudible) of back category, XX% in category fastest

key So profile are eliminate X adds the phase we we’re we really up to the first those think attributes that get a all product data hoping of chance product. superior that and to the

Joseph Schwartz

bat some that bogie indications? whether order rather or indication a off these to go hoping other determine there head is So you’re that that see you for in is to of you’ll pursue the

Amit Munshi

UC variables of as Yeah, parameter going three I think there’s sort to a key consider forward. around

magnitude endoscopic response. have of a The our To none of first other the the is healing. knowledge competitive released products partial in (inaudible)

the looking not we’re going are and we’re we head-to-head But see. effect So to clear how there. are to powered comparisons discuss there magnitude real

reporting to [etrasimod]. attributes We head-to-head of analysts other will one where will investors comparisons on be draw and

parameter The is landscape. second key the competitive

trial, products seen function in very their the category, delays the being it of recruiting You competitive substantial colitis space. ulcerative a crowded may in have

products recent. in to So issues look evolved. what have safety Other substantial had space of continuing how they’re the and see the category

does we as six smaller months not (inaudible) a using their very to up may look If So, of are some have own the to of broader the open IBD conversations. of interesting while a a indications from plan the partnership, a today as on then partners, having colitis different portfolio previously attraction. now terms we we play is ulcerative the give product we’ve the And and big the is And third, on landscape in receptive to would broadly third dependent than and be part those discussed. company. it

in as be we to will of XXXX. big we’ll at be areas those kind three looking So the head

Operator

from comes And of the from JMP. question line Butler our next Jason

open. line is Your

Unidentified Analyst

taking last landscape. you Jason. comment, touched competitive of to want to Hi its follow-up (inaudible) I on for the Amit the question. kind on just for Thanks on

are in of can about So (inaudible) setting. bit it’s in you these your is timing safety label, to it but there or your interesting that the timelines is comment else competitive landscape that the intact, simply agents on something

Amit Munshi

combined some XX see just happening X ulcerative is and biologics colitis and globally. up a I the there for think that clinicaltrials.gov buyers [slimming] you’d of older a this the running similar you in of if get that’s you between with phase space X of function with XX scan patent in studies the innovation did It’s space. phase

just very it their clinical connotations programs. for crowded a the to and will space get space So try it’s to

So program that rather it’s XXXX, access we’ll as more But a issue. issues you pretty as opportunity of get a than change clinical know in to these landscapes market quickly. we and

now at and side having issues with looking are We profiles. IBD effect space in overall categories the other substantial

to the we really directed SXPs. how products, been have really some [listed] at through the at in around times. comments we look market have not safety So products The at category think the like landscaping

SXP and believe and market SXP firmly I as etrasimod – next-gen are ozanimod the compound compound. genes only its addressing modulators So there the landscape massive cell remained and had solid the its in

Unidentified Analyst

the you’re ralinepag before finish the your data, there analysis Anything Regarding keen them? want any the subset get that you meeting to on FDA. is show particular particular in with analysis to

Amit Munshi

commented see a of less agency meeting now We want in that has submitted our experts. to more or is we submitted already things a as work most on and request want haven’t done. see. questions the not We’ve that It our with been might the substance means consequence which meeting, since its specifically to of

the to we’re experts Europe program. closely the overall fine in clinical and US with We thinking liaise continue and around off

make As illuminates I this our fully to be of our program sure objective mentioned, compound. that the potential is bold and

keep take ears internally, with the we we where but all do could them. the and think continue to I need we work get ground So to ideas are our much good close we’re pretty to done eyes

Unidentified Analyst

outlook year? expense the the us guys for on the It’s a of of quick expenses, you can give sense rest

Kevin Lind

is XX in range continue to excluding litigation that, like items guidance in quarter providing expense should we burn of I to not XX that be think but thing. of sort around a - we’re our that sense updated one-time be

Operator

from next line Morgan. our And comes of JP question of Fye the Jessica

open. Your line is

Unidentified Analyst

data on provide about This will for data that we better I’d get to UC from your you information you better asset taking etrasimod indications thoughts potential be other Jess, on can the of much how Amit will have be our you data other appreciate of questions. that for think do is in terms of characterization the characterization Ryan you the terms you of to in of or like wait sort in a just Once of the the able get indications. need some build to that understanding before set out?

Amit Munshi

Ryan, that’s a great question.

ways about the think (inaudible). about of this high we we One and we got such we selectivity think understand category specifically etrasimod the rapid receptor is, clearly on-time

better on We is competitive cell good multiple more lymphocytes. and work have sense of one types being primary the these The T products. you thing as is the product know than a where the products important immune

seen fast time. we’ve also reduction. have reduce steady volunteers T in that recover time So the very all range we’ve are we get can terms XXs rapidly, on healthy state lymphocytes in very ability that and of of T other seen type lymphocytes and XXs that to low they rapidly to products off And high

that signals. well view translates to So clinical from our senior point of in

So T once type indication mediated. to point patients, are a other that’s believe lymphocytes in read from our reduction good lymphocytes T we of see there think vantage that’s that we I through

far read-through really much lymphocytes all types focused to the potential As from set across for a dozens of on example, I the here T and lymphocytes more activity very primarily T indications being narrowly in just tissues not dozens of are thorough body, Jak focusing have like indication broad suggestions better inhibitors reduction here only a exhaustive mediated. lead Unlike, that broader mentioned provides indications. of across ubiquitous our and the market analysis and that opportunity we’re

Operator

the comes of question from from next Citi. Beatty our Joel And line

line open. Your is

Unidentified Analyst

thanks taking on This quick my two Shawn on I (inaudible). for Joel, calling (inaudible) have in for the question. one and

What First your how of success design, new the number EIM find the indication. patient are did coming the in data sort there for trial UC, now change estimates EIM combination that with any you that and how indication. in with did

Amit Munshi

separate a number so and of number started at haven’t [DERM] that On at we’ve EIMs as you a blinded in data as EIM we the patients. got patients study won’t disclosed know look the we looking disclose the of we those

November if as patients in we the we more XXX UC existing which are we looking you the stands clearance. patients in may psoriasis, is enough get of things X combine between we and at study study. there study mentioned And simply open-label spontaneous spontaneously an erythema currently that like at ulcerative at psoriasis, idea where and recall have stragglers and dermal kinds occur different and in And now patients, patients I a with those an simply that that will in the already here there the we’re few looking enrolled the Our initial the were very look, manifestation colitis patients and read-through.

have that data both quantitatively and colitis commensurate be So able be you both pull data We’ll between to to read-out that that qualitatively studies. we’ll can ulcerative the and readout. expect the with

Unidentified Analyst

on SXPs are And there then the other have the one could to efficacy that in indications of SXPRX (inaudible)? the etrasimod, of second etrasimod activity

Amit Munshi

be In PX proliferation, In studies true. should studies migration to yet animal activity in manifestations. SXPX seen. we in translates multiple and consistent dermal actually definitely see cells say benefit a in the dendritic models, to got clinical cells we that be that I It’s how activity the believe is and in non-clinical access that to in non-human that dendritic

full to that plays definitely how and to from the see the enough just matter us time able out be we a time And we’ll we spent to first your implications, when EIM think benefit. attribute, yet elucidate be clinical data exploring of we it’s it’s a question. So the positive really for see haven’t going

time a So that. little of give us bit on

available day, every that indications continue the range UC are across broad to and those know and we’ll press class. are about more out to more the study we’ll of SXP We compound learning the of

Unidentified Analyst

the your be point area just my phase for last has FDA? with to exploratory on data work the the meeting in question, end done following ralinepag, to what prior released X of And that sort

Amit Munshi

submitted the you the of questions FDA as said in design [instrumental] date with work use sure Well agency the in you from a etcetera, we making process before package. the questions ralinepag statistics many terms conversations we package we and to the side briefing and Most get for waiting briefing done the of so are the endpoints, as a for know analysis the of of in that is really the we’re the It’s agency. of matter data. study of the terms on the tight some

lots So, and need issues as know to you non-clinical there’s addressed. of that be too

be addressing overtime, a agency So program to type get get clinical again range you and of make as those as we’ll package back the there. that the sure to some or will and key clarity clinical with soon guys near-term to come we priorities able we we to our

Operator

And from our of Carr & line next question Company. from Needham Alan comes the

Your open. line is

Alan Carr

sense Regarding actually FDA, start (inaudible) to starting the we’ll to convey specialized as to program a going you a of looks and can street? immediately them, that XXXX? like those wondering After some outcome that that now, of from PDC you your the (inaudible) I’m another involve? and around quick etrasimod be going ones should in indications, it program other the then be these up some is these you’re discussions, others any are more what you couple wondering And or sense give what going of little and get perhaps including to the until get you question with your a to interactions the going feedback coming how is got from while

Amit Munshi

back and start me then to etrasimod ralinepag. with Let

continually exporting in range fully the etrasimod to we etrasimod, anticipate the of On broad indications.

these know to we as love we’d try liver of before to competitive that products an discussed exciting mediated interesting beyond tox potential deliver very them we’ve compared that favorable potentially the to profile therapeutically point, there’s looks keep for maybe we are as as T-cell and can can. PBC. conditions that We As you think etrasimod all a for liver range the us clustered

be time around ulcerative and (inaudible) of get experts spending etrasimod data path to you phase have that plan more we’ll back those biology, about making guys understanding X We’d clinical love the understanding to we’ll etrasimod. on come and that, some we the broader do the time So evaluating in for field and the potential the we the colitis. sure

you the of for what etrasimod strategy complete a picture So have is.

we’re forward you than sorry to question, that So your and make planning back question, repeat having about to conversation. got want can to Coming ralinepag I a your look right. sure I’m ralinepag I

Alan Carr

convey getting about to as is complete outcome that the Are or soon am meeting is you’re what your going together to take gets look going to little program sort us that to and tell just I those near-term it’s tell to after a you discussions will whether going you event us as program you wondering and how while like. that’s going here you’re put then something of there that your running? a

Amit Munshi

a having am ways the I to so There’s only capacity, different interaction. FDA guys to the and we walk sure much I looked When enough. this. exercise don’t agency, I about delay FDA and you’re we don’t for date but more, we broader a have you set potential here, outcomes is There think study. minutes’ many range beyond long talk potential type have about space I interactions only once of get of a six the options to you slice narrow think we’ll the talking tell

think So we it’s come up going We we don’t guys. be make to to you to absolutely buttoned overly back just we’re sure complicated. want before

from delay the have our street substantial we the broadly. a conversation have anticipate don’t our time time I we to So with the interaction

Operator

back I remarks. for This over closing call Munshi now the like to today’s Amit session. Q&A concludes to turn would

Amit Munshi

look We’ve a today. to lots continue. per to as we We we focus today it joining priorities. forward on updating and Thanks Really, guys earning exciting sure milestones looks us continue on of on everyone the season, for making and competing will and and call busy ahead shareholders. really our execution progress deliver been appreciate patients you got

thanks So everyone.

Operator

in participating you and all may today’s for great This a Everyone disconnect. you conference. thank program have the conclude gentlemen, and Ladies does day.

Kevin Lind	CFO
Amit Munshi	President and CEO
Joseph Schwartz	Leerink Partners
Jason Butler	JMP Securities
Jessica Fye	JP Morgan
Alan Carr	Needham & Company

Arena Pharmaceuticals (ARNA) 8 Nov 172017 Q3 Earnings call transcript