Many of us have long felt that the sum of Arena's parts have never been properly valued by the market. Hopefully this is the start of a new day for Arena, Arena Neuroscience and who knows, eventually, Arena Cardiovascular.
It appears that Arena Neuroscience will be targeting neurodegenerative diseases like Alzheimer's, Parkinson's and Huntington's. These are conditions that Arena could not fund or have the manpower to tackle alone. The new company, however will have the flexibility to raise funds and eventually partner or sell itself depending upon their success. Unfortunately, this field has been fraught with failure, so some separation from the parent Arena should provide some protection should the endeavor fail.
I have been doing some additional research on what receptors Arena Neuroscience will likely be targeting. One of the targets will likely be S1P receptors but it is not yet clear if this will be etrasimod or a different S1P modulator. Amit made several references to one clinical compound and two late stage preclinical compounds. It seems possible that Arena could license etrasimod to Arena Neuroscience for certain neuroinflammatory conditions. I will provide some of my research in a later post that supports specific receptor targets and indications.
I picked out some of the details from the conference call about the new Arena Neuroscience.
Arena Neuroscience represents the opportunity to replicate
the strategy we brought to arena 3 1/2 years ago… and now we get to do this
again in neuroscience. On the back of
multiple clinical and pre-clinical compounds and an emerging platform of
microglia inflammation, we are poised to progress important medicines and
uncover important value for shareholders. In that context I am extremely
excited that Kevin Len has agreed to lead our subsidiary Arena Neuroscience
Inc. As our President and chief executive office.
Can you provide additional color on the rationale of carving
out arena neuroscience now, at this
early stage and what strategic flexibility that separation gives you? Given the
history of S1P in MS, is there any interest in that disease area specifically?
…It’s important that we have focus on the neuroscience area
and there’s no better way to create focus then to have a senior leadership team
around the compounds. Point number two is in the near term, as we progress
these compounds… there will be a point in time when additional capital will be
required. This allows us to bring additional capital into the neuroscience
portfolio and eventually potentially split it out as a standalone company. It
creates a tremendous amount of flexibility for the company overtime and I think
that’s really important, but that is secondary to creating incredible focus on
three compounds that are either clinical or late pre-clinical stage.
We have an underlying platform in microglia inflammation, it doesn’t look too
dissimilar than Arena in 2016.
On the MS question we're not giving out a lot of details on
the indications yet. There’s a lot of work yet to be done on these compounds I
will tell you that we have shied away historically from the MS stage simply
because of the competition landscape and the pending context of multiple compounds in the space.
If you look at the indications for the current S1P, the vast
majority are in the neuro space. We’re excited about the potential of an S1P (?) being focused on that as a part of neuro.
about Arena Neuroscience and S1P vs
ceramide in neuroscience indictions:
bit early for us to discuss specific compounds and indications. We’re in the
process of showing up critical pieces of animal information and intellectual
property. We’ll be doing so on a future
earnings call. Kevin will be building up his organization and his team. A
critical piece of intellectual property needs to be filed. And some animal work
needs to be completed and then we’ll come back to you and talk about that
As you’re pointing out there’s a tremendous amount of
interest in GPCR projects broadly in the neuroscience space. Having both clinical and pre-clinical
compounds and an underlying platform really
gives us a portfolio that’s commensurate or comparable to companies in the $1
to $2 billion market cap space that are
already public. That’s a really exciting place for us. We’re looking forward to sharing that
information with you at a future point in time.