Arena Pharmaceuticals

Arena pharmaceuticals is a stock that we are looking to add to our portfolio. Below is a brief description of the financial fundamentals for Arena, as well as some current analyst recommendations , and a brief description of the company. Before we get into that detail, we want to state that all trading carries with it a risk. Please do not risk any funds that you cannot afford to loose.

Arena Pharmaceuticals, Inc. (Arna) is a clinical-stage biopharmaceutical company focusing on the discovery, development and commercialization oral drugs in four therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases. The CompanyGÇÖs advanced drug candidate, lorcaserin hydrochloride (lorcaserin), is being investigated in a Phase III clinical trial program for the treatment of obesity. It has a pipeline of compounds that target known and orphan G protein-coupled receptors (GPCRs), and includes compounds being evaluated independently and with its partners, Ortho-McNeil Pharmaceutical, Inc. and Merck & Co., Inc.ArenaGÇÖs other lead internal development programs include APD125 and APD791. During the year ended December 31, 2006, the Company initiated dosing in a Phase II clinical trial of APD125, which is an orally available drug candidate that it discovered and has the potential to reduce insomnia symptoms and improve sleep maintenance.


Arena Pharmaceuticals Inc: Stock Rating Detail
6 (10 being the best)
The grades below summarize the effects of key business and trading trends on this stock.

FundamentalGrade: B
• The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. Positive
• Earnings growth in the past year has decelerated rapidly compared to earnings growth in the past three years. Negative
• One or more analysts has modestly increased quarterly earnings estimates for ARNA. Positive

OwnershipGrade: C
• Insider trading information is unavailable or inconsistent.
• Shares are being heavily sold by financial institutions. Neutral for a small company like ARNA

ValuationGrade: B
• The price-to-earnings multiple is a negative number. No effect
• The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe. Negative for a small company like ARNA
• The ratio of ARNA's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.

TechnicalGrade: F
• The StockScouter measure of relative price change and consistency is very low. Very negative
• Previous day's closing price for ARNA was slightly below its 50-day moving average. Negative

Arena Pharmaceuticals Inc: Analyst Ratings
Average brokerage recommendation is Moderate Buy.

Our trades on this stock are as follows:
Purchase stock at $7.69
Sell 7.50 March call for 1.40
18.2 % in 44 days.

Purchase stock at $7.69
Sell above call
Buy 5 March put for 0.35
13.6% in 44 days.

Talk to you tomorrow.