What happened

Shares of Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), a biotech rising like a phoenix from the ashes of Belviq's commercial flop, rose 10.6% in November, according to data from S&P Global Market Intelligence. Despite declining revenue from an ill-fated anti-obesity drug, investors have plenty to look forward to in 2018.

So what 

Although Belviq's commercial launch has been deeply disappointing, Arena's development pipeline boasts a handful of clinical-stage drugs with enough potential to put the disaster in its rearview. Encouraging data for a pulmonary arterial hypertension in development, ralinepag, lifted the stock earlier this year.

Person in suit drawing an upward sloping chart.

Image source: Getty Images.

More recently, Arena Pharmaceuticals treated investors to encouraging news for an anti-inflammatory named etrasimod. This is a sphingosine-1-phosphate (S1P) receptor modulator in the same class as ozanimod, a candidate for multiple sclerosis and irritable bowel disease that Celgene paid $7.2 billion to acquire a couple years ago. Last month, Arena investors cheered when the company finished enrolling patients into a mid-stage ulcerative colitis study with etrasimod. Predicting potential mergers is a dangerous game, but success would most likely attract biopharma's biggest dealmakers.

Now what

We can expect Arena's stock to soar again if etrasimod's mid-stage ulcerative colitis study is successful. We won't have to wait long, the company expects data in the first quarter next year.

Etrasimod isn't the only program about to throw off data in early 2018. In the first half, Arena expects to present results from a study with a cannabis related pain relief candidate, APD371, and two trials with Axovant (NASDAQ:AXON) partnered nelotanserin, a candidate for the treatment of neurological issues associated with a form of dementia.

As of Sept. 30, 2017, Arena had cash and cash equivalents of approximately $278.7 million. That should be enough to fund operations for another year given the increased operating costs associated with running a larger slate of clinical trials.

Cory Renauer owns shares of Celgene. The Motley Fool owns shares of and recommends Celgene. The Motley Fool has a disclosure policy.