Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) shares took a dive by 5.97% as the shareholders had to face a loss of $2.44/share and closed at $38.40. Due to the decline, the company now has a market cap of $1.51 billion. In another development, Wells Fargo & Co (NYSE:WFC) upgraded Arena Pharmaceuticals from Market Perform to Outperform.
The company had a rough trading in the share market in the past few days with the shares opening at $41.00, trading as high as $41.35 and then coming down to $38.31. Last year the shares of the company traded between a range of $41.92 and $11.30 and currently its 200-day SMA is $21.73 and 50-day SMA is currently $30.04.
Area Pharmaceuticals Receive Upgrade From Wells Fargo
The biopharmaceutical company engaged in developing, discovering and commercializing novel drugs recently received an upgrade from Well Fargo’s Jim Birchenough who promoted Arena from Market Perform to Outperform thereby increasing its price target for the stock from $19 to $53. Currently the San Diego, CA-based company is awaiting Phase 2 data for the S1P modulator estrasimod in ulcerative colitis.
As of now, Arena Pharmaceuticals is targeting G protein-coupled receptors (GPCRs) to find solutions for the unmed medical needs. Birchenough said that he upgraded the stock as Arena Pharmaceuticals showed significant progress last year on ralinepag for pulmonary arterial hypertension. It is a drug that has a strong possibility of getting approved due to positive FDA environment.
Birchenough also said that Wells Fargo believes that both the assets have a good chance of attracting large pharma interest. He expressed greater faith in the existing management of Arena Pharmaceuticals who he expects will realize the appropriate pipeline value.
The American biopharmaceutical company has already provided and established the biological proof for selective S1P modulator etrasimod with 67% lymphocyte reductions as compared to the emerging S1P modulator ozanimod and the already approved S1P modulator GILENYA. According to Wells Fargo the net present value estimate for estrasimod is $25/share.