Arena Pharmaceuticals (NASDAQ:ARNA) experienced a moral victory last month when it announced positive preliminary results from its phase 2 clinical trial for APD125, which aims to treat people suffering from chronic insomnia. However, third-quarter results released yesterday hammered home that the company still has a way to go.

Arena posted a Q3 net loss of $0.54 per share versus a loss of $0.43 for the year-ago quarter. Quarterly revenue did increase a little because of money from collaboration agreements with Merck (NYSE:MRK) and Johnson & Johnson (NYSE:JNJ), but that increase was more than offset by rising research and development costs for a pipeline that includes lorcaserin, an oral drug candidate for obesity that is in phase 3 clinical trials.

Among potential candidates, lorcaserin and APD125 are the furthest along, although Arena does have an anti-thrombotic candidate and a type-2 diabetes drug in phase 1 trials. Given that it will be some time before the company can bring one of these products to market, it looks as though it will have to continue to endure some more quarters in the red.

Arena isn't in a cash crunch now, but it will be important to see more progress from the company's pipeline if the market is to reverse the decrease in the stock price over the last year and a half.

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Fool contributor Billy Fisher does not own shares of any of the companies mentioned. The Fool has a disclosure policy.