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Chris Katje

Grand Rapids, MI

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Stock Pick by Chris Katje

ARNA: Blockbuster Obese Pill in Phase III Trials.

Start trading ARNA with real money!

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1 ratings
Posted 3515 days ago on 12/12/07

ARNA will go UP
$2.50 on 12/12/07
$23.37 (2,586.21% from time of market call)

Arena Pharmaceuticals has a potential blockbuster drug (Lorcaserin) in phase III trials. The drug is expected to be decided by the FDA in 2010. There have been no problems in a six month trial and the results have been better than the placebo group. A patent on the drug would last until 2023. The company also has an insomnia drug in late phase II trials. A diabetes drug in in phase I in a collaboration with Ortho Mcneil (a Johnson and Johnson company). Arena is receiving payments from Ortho McNeil and Merck for collaborations. The company has negative earnings currently. Lorcaserin, if approved, would bring in billions of dollars in revenue as the drug is not partnered with another company. The company has almost $400 million in cash and no long term debt. I rank the stock a long term buy as I feel based on reading the 2006 annual report, which includes the phase II results, that Lorcaserin will be approved.

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Posted 6/5/2008, 4:09 pm

I have to agree that this stock is a buy and I think that one of the big drug companies will buy it around your target price, possibly soon. If not, and Locasserin is approved by the FDA, this stock could easily go to $100.00. A safe and effective diet drug will generate billions in sales each year. There are currently less than 100 million shares of Arena. The rest of the pipeline is just gravy.

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