What happened

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) continued its monster climb this year with a 10% gain in September, according to data from S&P Global Market Intelligence. Preclinical results presented at a scientific conference boosted the outlook for the company's pulmonary arterial hypertension (PAH) candidate, which recently succeeded in a mid-stage clinical trial.

So what

Arena's lead candidate for the treatment of PAH, ralinepag, hit its primary efficacy endpoint in a 61-patient mid-stage study, but the pulmonary vascular resistance benefit recorded might not be enough to please regulators. The U.S. Food and Drug Administration approved Uptravi, now a Johnson & Johnson drug, in 2015 based on results of a long-term outcome study.

Upward-sloping chart and dollar sign comprised of pills

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Like Uptravi, ralinepag boosts circulation through pulmonary arteries by binding to prostacyclin receptors. It stands to reason that Arena will also need to complete a years-long outcome study for ralinepag before the FDA considers its application complete. Investors were encouraged by presentations of positive preclinical data last month, largely because it strengthens the chances that the vascular resistance benefit observed in the small phase 2 trial will translate to improved outcomes.

Now what

Arena is still preparing for a customary meeting with the FDA to plot a course for ralinepag's future. The results should be strong enough to warrant a pivotal trial, but odds are the agency will insist on measuring long-term outcomes.

While we wait for more details concerning ralinepag's future, the company could find out that it has two more candidates ready for phase 3 studies. A phase 2 ulcerative colitis study with etrasimod should have data before the end of the year, but all eyes will be peeled for results from a phase 2 trial with ADP371 that should also wrap up this year. It's early, but this cannabinoid receptor agonist could be the next big thing in pain relief.

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