Shares of Arena Pharmaceuticals (ARNA) soared 65% after the company reported early positive results using APD334 for the treatment of Autoimmune diseases. Autoimmune diseases occur when a person's immune system starts to attack the various healthy cells in the body. Today's news showed that patients receiving APD334 displayed a dose dependent decrease of lymphocytes in the blood by about a mean decrease of about 69% from the normal baseline. Today's volume change is pretty drastic as well, trading about 25 times normal average daily volume.

This news is significant because this type of efficacy seen in the phase 1b trial using APD334 against autoimmune diseases has also been seen in late-stage phase 2 and phase 3 trials using the same exact molecule type. This molecule type is known as an oral S1P1 receptor built for a biological response in the immune system. The reason for the high rise in share price is because this drug made by Arena could be applied to many big diseases that target large markets. These markets include: Multiple Sclerosis, psoriasis, and rheumatoid arthritis. 

In terms of safety the drug APD334 displayed no signs of heart rate problems or elevated liver enzymes in the body. This makes the drug remarkably safe as well as very efficacious. Now that the company has established this final phase 1b finding they can begin to test a phase 2 trial in any autoimmune disease of their choice. Arena has already chosen to expedite this drug compound to be tested in phase 2 trials for Ulcerative Colitis and Crohn's disease. 

Arena Pharmaceuticals already has an approved drug for weight loss known as Belviq which is being marketed by Eisai Inc. (ESALF). We believe that Arena is a good long term biotechnology company to own because it has a nice pipeline of drug compounds that have shown to some degree to be efficacious. Plus the risk is slightly minimized since the company already has one FDA-approved drug product on the market.