Arena Pharmaceuticals cuts loss, focuses on obesity drug.(Arena Pharmaceuticals Inc.'s financial news)(Financial report)

Arena Pharmaceuticals, which plans to submit a new obesity drug to the FDA this year, posted a smaller second-quarter loss Aug. 3 as it shifted focus toward its lead drug candidate.

The biopharmaceutical company reported a loss of $38 million, or 48 cents a share, compared with a loss of $65.8 million, or 89 cents per share, a year earlier. Revenues declined 8 percent to $2.4 million from $2.6 million. Research and development expenses dropped to $24.2 million in the quarter ending June 30, from $56.2 million in the second quarter of 2008.

Based in the Sorrento Valley area, Arena is expecting to report results from a late-stage trial of the drug candidate in September, and plans to file the drug with the FDA before the end of the year. A study of 3,200 people on the drug for a year showed that two-thirds of patients lost at least 5 percent of their weight, with an average weight loss of 17.9 pounds.

That surpassed an FDA guideline for weight-loss drugs: At least 35 percent of people taking a drug must show a 5 percent loss, and the number achieving that level of weight loss must be at least double the number of people taking a placebo. In the placebo group, almost a third of patients reported weight loss of 5 percent or more, and average weight loss was 7.4 pounds.

"Based on its emerging efficacy, safety and tolerability profile, lorcaserin has the potential to be an important new treatment option for patients needing to better manage their weight and improve their overall health," Arena CEO Jack Lief said in a statement.

As of June 30, the business held cash, cash equivalents and short-term investments of $39.6 million. Including net proceeds from a $100 million loan from Deerfield Management, a health care investment organization, and a $49.7 million public offering in July, Arena said it expects to end the year with $120 million to $130 million in cash, cash equivalents and short-term investments.

Arena Pharmaceuticals said it recently cut 130 employees, or 30 percent of its U.S. work force, in an attempt to conserve cash to support its expected filing of a New Drug Application for lorcaserin.

Arena stock trades on Nasdaq as ARNA. Shares closed at $5.12 on Aug. 4. The stock's 52-week range was $2.26 to $7.42, as of that day.

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