Arena Pharmaceuticals, Inc. (ARNA) CEO Amit Munshi on Q3 2018 Results - Earnings Call Transcript

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About: Arena Pharmaceuticals, Inc. (ARNA)
by: SA Transcripts

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) Q3 2018 Earnings Conference Call November 7, 2018 4:30 AM ET

Executives

Kevin Lind - Chief Financial Officer

Amit Munshi - President and Chief Executive Officer

Analysts

Kennen MacKay - RBC Capital Markets

Joel Beatty - Citi

Jessica Fye - JP Morgan

Alan Carr - Needham & Company

Joseph Schwartz - Leerink Partners

Bill Tanner - Cantor Fitzgerald

Operator

Good day, everyone, and welcome to Arena Pharmaceuticals' Third Quarter 2018 Financial Results and Corporate Update Conference Call. This call is being recorded. [Operator Instructions]

I will now turn the call over to Kevin Lind, Chief Financial Officer of Arena. Please go ahead.

Kevin Lind

Good afternoon, everyone, and thank you for joining us today. We hope you had a chance to review the news release we issued earlier today announcing our third quarter 2018 financial results. Joining me on today's call is Amit Munshi, our President and Chief Executive Officer.

Before we begin, I would like to remind you that we'll make forward-looking statements that involve risks and uncertainties, including statements about our focus, plans, goals, strategy, expectations, clinical and pre-clinical programs, R&D, regulatory activities and operations, and other statements that are not historical facts.

These statements are made in the context of the risks and uncertainties that are discussed in our filings with the U.S. Securities and Exchange Commission, which can be found on the SEC website at www.sec.gov, and include risks related to the amount and allocation of our available financial and other resources, timing and outcomes of regulatory decisions and discussions, timing of the initiation of our trials, and patient recruitment for our trials, which is competitive and challenging and may take longer than we project, pre-clinical and clinical data related to drugs and drug candidates and the timing of that data, which may not be as expected or sufficient for further development, regulatory approval, or commercialization, and collaboration and licensing activities. Our actual results may differ materially from our forward-looking statements.

Now, I'd like to turn the call over to Amit.

Amit Munshi

Thanks, Kevin. Good afternoon, everyone, and thanks again for joining our call today. As a reminder, we hosted a broad R&D day in October providing several key corporate and pipeline updates. Thank you for those of you that attended the meeting live and as well as to those who listened to the webcast.

During my comments on today’s call, I will refer to several of those updates and provide additional color as we continue to advance our promising product development programs; then Kevin will provide a financial review of the third quarter 2018, and then as always, we will conclude by taking questions.

So, looking forward, we continue to expect a significant number of potential catalysts over the next 12 months to 24 months of the business. In the near term, we’re focused on progressing the Phase 3 study for ralinepag and rapidly advancing etrasimod in the Phase 3 program in ulcerative colitis and Crohn's disease. In addition, we are planning the development path forward for olorinab on the exciting Phase 2 data that we delivered on this last quarter.

So, let’s start with etrasimod. As a reminder, etrasimod is a thoroughly characterized in-house developed once a day oral S1P modulator, with what we believe to be best-in-class receptor selectivity and pharmacodynamics. We believe we are the only next generation S1P modulator and has the broad potential to be the preferred oral option for patients suffering from a broad range of T-lymphocyte mediated immune and inflammatory disorders, such as IBD.

We continue to make substantial progress on the etrasimod programs since we delivered outstanding Phase 2 data from the OASIS trial. As you will recall, the study met primary and secondary endpoints with statistical significance for patients receiving 2 milligram doses of etrasimod at 12-weeks. Approximately, one-third of patients achieved clinical remission and the three-domain male score at week 12 in a patient population where upwards of 40% of patients have previously failed an integrin or an anti-TNF.

We’re in active dialogue with regulatory agencies that confirm the details of our registrational program, which will enable us to finalize the Phase 3 protocols that initiate the trials in ulcerative colitis in Q2 2019. Critically, we have confided the appropriateness of the treat through this design strategy that was presented at our R&D Day. We look forward to updating you on additional program details as practical.

Moving on to other indications for etrasimod. In light of the positive Phase 2 data in ulcerative colitis, we’re also looking to an aggressive development path in Crohn's disease, and again we’re in active dialogue with regulatory agencies. The primary biliary cholangitis or PBC study remains ongoing. As a result, PBC is a chronic liver disease with T-lymphocyte accumulate in the liver resulting in the destruction of bile ducts. We continued to expect with data readout in 2019.

Finally, on the back of limited to compelling efficacy data we saw in several ulcerative colitis patients with dermatologic manifestations, we recently announced that we’re planning a path forward in atopic dermatitis. Current therapies have efficacy in a limited set of patients and [indiscernible] to move in injectable biologics and other topical therapies. We believe there is a significant market opportunity to move this field forward to a once a day oral regimen that may not impact not only the dermatologic manifestations, but potentially the systemic implications of this disease as well.

We’re excited to further evaluate etrasimod in multiple indications going forward and believe that the only true next generation S1P modulator with vastly improved pharmacology and pharmacodynamics, and potentially improved safety and efficacy offers tremendous promise in the treatment of a broad range of autoimmune and inflammatory conditions.

Moving on to Ralinepag. Ralinepag as a potential will be the first of once-daily oral IP receptor agonist that provides continuous receptor engagement and drives improved exercise capacity and clinical outcomes in PAH patients. As a reminder, last year, we delivered unprecedented positive top line results from our Phase 3 study in the treatment of WHO Group 1 pulmonary arterial hypertension or PAH in a population with the majority of the patients who are on dual background therapy.

In October, we reported positive long-term data from the ongoing open label extension of the Phase 2 trial evaluating Ralinepag for the treatment of PAH. The Ralinepag demonstrates durable long-term improvements in both pulmonary vascular resistance or PVR and 6-minute walk distance. We also saw a favorable long-term tolerability profile.

To date, it is the only oral IP receptor agonist that has shown durable long-term improvement in hemodynamics and functional measures. Patients considering ralinepag in the original study clearly maintained improvement in PVR and 6-minute walk distance, and those patients switching from placebo Ralinepag in the succession trials demonstrated a similar magnitude of effect on both PVR and 6-minute walk distance.

Although the smaller sample side has limited some of the statistical comparisons. These data reinforce our belief that PAH patients can truly benefit from ralinepag’s improved receptor potency and extended pharmacokinetics. We look forward to updating you as we continue to make progress on our ralinepag advanced program.

Moving on to olorinab. Our peripherally restricted, highly-selective, full agonist to the CB2 receptor. We believe that this product has a potential to be a significant advancement in the treatment of visceral pain. In September, we delivered positive Phase 2 results for olorinab demonstrated a statically significant improved in abdominal pain over 8-weeks of treatment.

All patients with evaluable data at week 8 exhibited a pre-defined clinical response of getting 30% change from baseline in the average abdominal pain score or the AAPS. Treatment effects were demonstrated early and were consistent across the 8-week treatment period. Olorinab appeared safe and generally well-tolerated. We intend to advance olorinab, olorinab clinical program targeting gastrointestinal pain and look forward to updating you on the clinical path forward as we progress our planning.

In October, we also introduced you to an exciting new pre-clinical asset APD418, a first-in-class calcium-independent myofilament derepressor or CMD for the treatment of decompensated heart failure. APD418 targets a novel mechanism that improves contractility without adverse hemodynamic changes. A significant unmet need exists for the treatment of decompensated heart failure, the common hospital diagnosis for patients over the age of 65 and this disease progresses with the increase in the aging population.

We believe APD418 has a future potential to improve to provide a new therapeutic option by enhance cardiac contractility of avoiding the previous adverse events commonly associated with the current standard of care. New pre-clinical data will be presented at the upcoming American Heart Association Scientific sessions in Chicago this week. I look forward to sharing data as available and bringing this compound into clinic next year.

On the collaboration side, in October 2018, Everest Medicines received Chinese Food and Drug Administration or the CFDA Investigational New Drug approval for ralinepag. Everest IND submissions to the CFDA demonstrate an important milestone in the continued advancement of etrasimod and ralinepag and further solidifies our confidence in their expertise and capabilities to navigate the regulatory environment in this important and rapidly growth market.

Further, as we discussed on R&D day, we remain broadly open to select partnership opportunities, which allow us to optimize the delivery of these important medicines to patients, have a strong long-term strategic rationale for the business, and the NAND shareholder value. We will continue to provide updates as we move forward.

Moving on to the team. In August, we appointed Suzanne Zoumaras as our Executive Vice President and Chief Human Resources Officer responsible for our global people strategy. Suzanne is an accomplished business executive with 20 plus years of experience leading scaling and elevating human capital practices and capabilities for companies ranging from large public multi-nationals to early stage smaller enterprises.

Prior to Arena, Suzanne held Executive Management roles at several public and private technology and life science companies. Her vision and ability to create a roadmap for execution in scaling and enterprise will be instrumental as we adapt to our business growth.

So, with that, I like to turn the call over to Kevin for a corporate update and the financial review.

Kevin Lind

Thank you, Amit. I’ll provide a brief review of our third quarter 2018 financial results here, while more detailed results are discussed in our press release and in our 10-Q. For the third quarter, revenues were $3.6 million, consisting of $0.4 million in collaboration revenue and $3.2 million in royalty revenue. Included in the $3.2 million in royalty revenue for the third quarter was a 2.5 million non-recurring, non-cash accounting adjustment related to an increase in estimated future royalty payments for certain foreign markets.

In terms of cost, research and development expenses totaled $28.8 million in Q3, general and administrative expenses totaled $10.8 million, and we burned approximately $31 million in cash this quarter, excluding one-time items. Net loss for the quarter was $35.0 million or approximately $0.70 per share. At September 30, 2018, cash and cash equivalents and investment balance was $561.6 million, and approximately 49.4 million shares of Arena common stock were outstanding. Amit?

Amit Munshi

Thanks Kevin. In summary, our focus remains on working towards delivering our transformational medicines to patients and importantly scaling Arena to continue our ability to execute on our Phase 3 trials and time lines. We are excited about the progress and the milestones ahead for the company in 2019.

For etrasimod in the first half of the year, we anticipate initiating the Phase 3 program in ulcerative colitis, reporting important long-term data from the Phase 2 program in the UC and of course making important progress towards initiating the program in Crohn's disease and other indications. We continue to progress ralinepag’s Phase 3 advanced program globally and we will be disclosive in more details for the olorinab development program throughout the first part of 2019.

We ask that you review our slides from our R&D day for a robust listing of the catalyst and milestones ahead for our business. We look forward to continuing to update you on a robust, potentially best-in-class pipeline, as we continue to make progress and look forward to an extremely busy 2019 ahead.

So, with that I’m going to turn the call over to Q&A, and so, I’ll hand it off to the operator.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question comes from Kennen MacKay from RBC Capital Markets. Your line is now open. Please go ahead.

Kennen MacKay

Hi. Thanks for taking the question and congrats on the operational progress over the last couple of quarters. Just wondering if you could maybe elaborate a little bit on some of the data to come at Chicago and sort of where we should be focusing in this update to work for incremental signs of efficacy here?

Amit Munshi

Ken, you just cut out there at the last part of the question. You want to talk little bit about the data for APD418 in Chicago, and I didn’t get the second part of the question.

Kennen MacKay

Yes. Any particular sort of pre-clinical endpoints we should be paying attention to get a graph of potential clinical times of efficacy here?

Amit Munshi

Great, perfect. The presentation in Chicago is really one of the first opportunity for us to talk about the selected beta-3 receptor antagonist as a class and specifically APD418 and again to remind you we have positive inotropic activity in various animal models, and in this case, we will be talking about chronically instrumented dogs. These animals have pacemaker vent induced heart failure and will be looking at a pressure volume loops as a way of talking about being able to improve contractility. So, there is pressure volume loops and pressure volume analysis, is really the way this contractility is measured and that would be the endpoint that we would be looking at here.

Kennen MacKay

And then, maybe just turning to sort of the much lighter side of the developmental programs, as it relates to the base 3 planning for ulcerative colitis here, one thing I guess from, sort of an analyst or an investor seat, sort of what we should be looking at to, maybe get some additional comfort that, the timelines relating to your clinical development here could actually, reasonably be much shorter than what we’ve seen for some of the other agents in development in ulcerative colitis or if there is really just going to be sort of a watch and wait type approach as we get enrolment updates into that trial theoretically next year.

Amit Munshi

Ken, we're really optimistic about how we’re thinking about the program, and I think there is a couple of reasons why. Number one, the things that are in our control around the treat-through study design, many ulcerative colitis files historically have used a re-randomization scheme that adds significant time complexity and cost in the overall program. We think because of our FX size and our – and we’ve had this conversation with various agencies, we feel comfortable moving forward here, and we will be doing a direct treat through design, and that diminish a significant amount of time on the overall study.

In terms of the overall powering assumptions they are really driven by our bigger FX size. So, the larger FX size, the largest to be more prudent in terms of the overall study size naturally, we still need a broader safety database, but as you know there is different lengths to just that broader safety database. There’s three other things that we’re putting in place or already have in place that we think give us reasons to be optimistic. We’ve been working through coming out of the Phase 2 study where we believe is a proprietary methodology for site selection in patient referral.

So, we spend a lot of time evaluating our Phase 2 work evaluating all the other ongoing trials and we think we’ve got some really interesting methodologies for understanding where these patients are and how they map on to the various sites. And then the final part of that day is, we have put our own field base team into place, one of the things we learned coming out of Phase 2, and if you recall, we inherited the Phase 2 program and is barely enrolling, it is probably the most difficult part of the market enrolment cycle that are a lot of studies ongoing, including the biosimilars and we were able to roll that study extremely quickly and we were able to do that with a really high touch program that we put into place and now we’re expanding that through a full field based team in the U.S. and in Europe designed to work with the clinical sites identified patients and make sure that the sites are, that the key barriers to any sort of enrolment are being handled on the ground by actual arena personnel.

So, both from the operational side in terms of people on the ground, in terms of strategically mapping sites and patients to this methodology we’ve developed, as well as just to give attributes to the products and large FX size, and the expedite trial design, we think we are in a much better position than other products historically.

Kennen MacKay

Got you. Thanks for the color there., and I’ll hop back in the queue.

Amit Munshi

Thanks, Ken.

Operator

Thank you. And our next question comes from Joel Beatty from Citi. Your line is now open. Please go ahead.

Joel Beatty

Hi thanks for taking the question. As far as the open-label expansion study of the ongoing ulcerative colitis trial, could you discuss what type of changes would be expected over time and what type of timing we might learn in those patients?

Amit Munshi

We will be looking at of course safety and tolerability and we will be looking at ongoing activity from a endoscopic improvement perspective. So, I don't want to speculate on where we’re going to see on optimacy [ph] and see it, when we see we don’t have any insight into what that data looks like today, but we will be looking at all the remissions scores, still if you can see, and of course any further endoscopic improvement and it is a thorough assessment at this time point, and so we will be hoping to come back to you guys with a pretty thorough and exhaustive view of how these patients continue to improve.

We do know that in this category patients do continue to improve. We’ve seen that in etrasimod trial. As you recall, we saw, our data at 12-weeks was better than their 32-weeks data, 32-week data and we're really looking forward to seeing that type of continued improvement add to the open-label data.

Joel Beatty

Great. Thanks. One other question for ralinepag, could you discuss enrolment in the Phase 3 program and provide an update on the number of sites coming online or the number of patients in the trial?

Amit Munshi

Joel, we're probably not going to provide that level of detail on sites that are literally changing day-by-day, but we are in a broad global program, sites are coming online, countries are coming online, and it is happening in a manner which you would expect which is a sharp curve up. So, we are going to continue to press on that and probably not going to provide a lot of detail until we're further into the program.

Joel Beatty

Very good. Thanks for the update.

Amit Munshi

Thanks, Joel.

Operator

Thank you. And our next question comes from Jessica Fye from JPMorgan. Your line is now open. Please go ahead.

Jessica Fye

Great. Thanks for taking my question. Can you just – as we think about the differentiation trial relative to [indiscernible] for ralinepag, can you talk about what would be considered a meaningful difference in PVR that would establish ralinepag as the agent of choice over [indiscernible] eventual genetics?

Kevin Lind

Jess, are you are trying to home in, in sort of a magnitude of effect?

Jessica Fye

Yes.

Kevin Lind

I think I understand that, PVR, you really have to go back to the pharmacology and pharmacokinetics are the two drugs, if you recall the FX size in tissue from PAH patients and looking at [indiscernible] regulation, we showed about [$6.5 improvement] over a [indiscernible], so we are sticking up on the Potent IP Receptor. And then importantly we lack that [indiscernible] so it’s going to be important to understand and the reason we’ve – within the hemodynamic study in the switch type, in that switch type model is to really understand the issue with selexipag is two-fold. One is they are not very potent on the actual receptor, and it is not a dosing issue. You can saturate the receptor, but you just can’t give enough up regulation at [indiscernible] and then on top of that you get this [indiscernible]. So, the idea is that patients on selexipag while they may be on a stable dose are most likely going to have incomplete responses from where you would want them to be. And so, moving them on that scale should feel pretty good. We are not going to comment on that exact magnitude of PVR, but we will say that, if you look at PVR at peak and PVR at trough you should be able to demonstrate a fairly sizable difference in PVR magnitude just given the fact that selexipag has a relatively short half-life of 8 hours and the dose could be [indiscernible]. So, their troughs are pretty and PVR at trough is definitely a problem for selexipag.

Jessica Fye

Okay. Got it. Thank you.

Operator

Thank you. And our next question comes from Alan Carr from Needham & Company. Your line is now open. Please go ahead.

Alan Carr

Hi. Thanks for taking my questions. Big picture one, I wonder if you can give us your update us on the cash burn in the long-term? How long you expect that to last and what’s your thoughts are on in terms of continued expansion of the pipeline, are you content with the, one of the three that you have plus the heart failure one that you're going to be advancing, are those the four that you're going to be working with for the foreseeable future, do you plan to bring others into the clinic? Thanks.

Amit Munshi

Yes. I think we have our handful at this point. We got sort of two products in our cardiopulmonary franchise, we’ve got two products heading into our broader GI autoimmune franchise. So, in terms of pipeline expansion I think we are in very good shape. We’ve got a nice balance between early stage ideas like APD418. We’ve got some – up through the Phase 2 things happening with etrasimod and things like Atopic dermatitis and PBC, as well as the lower [indiscernible] Phase 2 to give us a nice basket of Phase 2 readouts for the next 12 months to 18 months. And then of course, we’ve got the Phase 3 programs. So, those are really nice kind of balanced portfolio approach. So, given our – it is not as much a cash burn issue, but it is an execution focused issue. I think at this point, I think we have our hands full. So, let me hand it up to Kevin to talk about cash burn.

Kevin Lind

Yes. In terms of cash burn, what we did see was, we saw slight creep up in cash burn this quarter, up to 31, and that’s kind of consistent with what we’ve told folks, which is, it’s going to start picking up as we initiate these Phase 3 studies. We’re not giving guidance around how long the cash flow lasts, just because were – the burn for 2019 just because we want to make sure we get to agency and finalize our discussions around the etrasimod and have that fully baked – fully come back to you folks and discuss it. But we feel like we're in a very strong position with over $560 million in cash. And we have tremendous opportunity ahead of us due to the fact that we own our own products in all the major markets, which gives us a lot of flexibility.

Alan Carr

Great. Thanks for taking my questions.

Amit Munshi

Thanks, Alan.

Operator

Thank you. And our next question comes from Joseph Schwartz from Leerink Partners. Your line is now open. Please go ahead.

Joseph Schwartz

Alright, great. Thanks, and congrats on all the progress. It's good to hear that you were able to confirm the 3Q strategy for the Phase 3 for etrasimod with the FDA, were you able to gain any clarity on what you need to demonstrate in the quarter with the exemption of first dose heart rate monitoring requirement as well?

Amit Munshi

Yes. Hi, Joe. So, as a matter of record, we were not going to get into detail of ongoing conversations with the agencies. I can confirm that we’re having a conversation with the agency, given that that our heart rate effects were substantially lower than competing products that we sold, for example, no evidence of sinoatrial arrest. We didn't have the broad – technically, AV blocks that our competitors have had.

So, we continue to have that dialogue with the agency. And rather than give you sort of point in time here, I think, we'll come back with more detail as we finalize the protocol. But we are having those conversations, and we're excited about getting you guys all those data as we walk that out.

Joseph Schwartz

Okay. And I don't know, you might have the same answer for this question, but how do you expect the co-primary endpoints of clinical remission and then just got the permission to work in the Phase 3 Crohn's study. Is this something that’s been established with the FDA yet?

Amit Munshi

Yes. So, for Crohn's, we’re a little bit behind ulcerative colitis in terms of our broader sort of interaction. So, again, we’ll get through the agency, we’ll lock up the study designs and then promise to come back and give you guys all the details in terms of how we're thinking about this.

There are moving parts in terms of both patient definition as well as endpoints in both UC and Crohn's and we've had a very productive and frankly, a very useful dialogue with the agency in terms of being able to shape where this really goes. We're very pleased with the progress so far, but just give us a little bit of time to finalize all those conversations and we’ll come back and give you all the details.

Joseph Schwartz

Thanks for the update.

Amit Munshi

Thanks, Joe.

Operator

Thank you. And our next question comes from Bill Tanner from Cantor Fitzgerald. Your line is now open. Please go ahead.

Bill Tanner

Thanks for taking the question. I'm going to head one for you on etrasimod. And I was just curious about any S1P analogs with comparable pharmacology to etrasimod. I’m sure you have those and you recovered, and wondering about if there has been contemplation about advancing any of them in some fashion? And I guess, the reason being us thinking about atopic dermatitis indication, wondering about whether you're waiting maybe in the water, where you're going to have differential pricing for some of the other etrasimod indications? And then a little bit on the atopic derm, how you might think about commercializing across the broad indications, and whether or not another analog might give you some flexibility to partner an analog and not have to do anything with etrasimod? Thanks.

Amit Munshi

Absolutely, Bill. Those are great questions. So, things we thought about internally. We do have a, as you mentioned, a cupboard full of other S1P modulators with all of slightly different profiles, all again sort of next-generation compound. We've chosen to take etrasimod. We think there's a strong business rationale, and we think we can get to a – an eventual pricing place that, that makes a lot of sense across, both derm and GI.

There are other potential diseases, however, independent of both GI and derm, where pulling a backup compound might make sense and we’ll continue to evaluate that. So, we've got a team actively working on looking at our backup compounds, looking at where within the 84 high potential indications we’ve previously identified, we may choose to go.

We continue to aggressively look at other delivery methods for the compounds and to hit different target organs. So, I don't want to get into too many details today, but we are actively looking at – we also should go long-term both in – as we get more animal work done, as we get more formulation work done, we're excited to come back and talk about our strengths.

Bill Tanner

And then as it relates to the PBC program, I mean, I guess, the data will tell you a lot, but I'm just curious if there – I’m assuming there's going to be some bar at or above which relative to other PBC experimental therapies you're going to want to hit or with the contemplation and B, well, it's going to – it’s a different mechanism of action versus some of the others and it might find a place as part of just polytherapy?

Amit Munshi

Yes. I think this is – I think it’s been on the head here. This is all going to be part of a cocktail of polytherapy approach in PBC just simply, because we're not focused on the cholestasis, independent of the actual underlying autoimmune trigger. So ideally, one would be fantastic, again, it’s one of the reasons we started the study, wouldn’t be fantastic if we could simultaneously blunt the ongoing autoimmune insult, as well as manage the downstream cholestasis, the ductopenia, the fibrosis and the eventual cirrhosis.

So, again, the idea is that, this disease, because these therapies work across the different parts of the disease continued and they would be used in combination. So, again, the data will tell us exactly where to go with this, but we think that's really the hope here.

Bill Tanner

Got it. Okay, thanks very much.

Amit Munshi

Thanks, Bill.

Operator

Thank you. We have a follow-up from Kennen MacKay from RBC Capital Markets. Your line is now open. Please go ahead.

Kennen MacKay

Thanks for taking the follow-up here. This is just more of a sort of strategic question on APD418. I was wondering, I mean, if you could maybe sort of elaborate a little bit on sort of where this came from, and how this was selected? And sort of internally, how many people you have dedicated to looking back through some of the potential drug candidates within that libraries that you have there could be pushed forward into the clinic? In other words, is this something that we could expect to see more of, if some of these additional candidates look like they have strong additional chemistry and sort of a point biologically?

Amit Munshi

Sure. Ken, all fantastic question. So, this was an in-house developed program, along with the other ones. When we first joined here as a management team in the middle of 2016 through the first six months, we had various researchers, the research group, the translational medicine scientists come present all the things they were working on and a lot of whom were orphan GPCR targets or targets that weren’t far enough along where they were druggable.

In this case, you had a receptor that was well-characterized. You had a chemical matter that had worked against it. We had a small team working on this in the background. They continue to progress until such point as we were confident that we can come out and talk about it. We have some additional things like this that are early stage, and we've got literally just a handful of people kind of working through them and working on some of these options.

To the question that was asked previously, I think for now, we're probably not going to progress anything broadly beyond what we have in our portfolio. We just have – with the Phase 3 programs, the multiple Phase 2 programs, we're heading into, I think, certainly Phase 3 trials to fully supported Phase 2 trials, four to five Phase 2 trials moving one preclinical compound forward doesn’t really stress our system. But I'm not sure we can do much more beyond that, but we’ll be prudent about it.

We want to make sure that we don't let the clock run on some of the preclinical intellectual property. In some cases, where it doesn't fit with what we're trying to do, we released [indiscernible] on a compound that has an application in urology, where we wanted to go.

So, we’ll continue to look at those kinds of options. But we're incredibly fortunate here. The scientists at Arena historically did a – an absolute amazing job with these compounds and it’s our job to really begin to figure out when and how we stage these programs over the next couple of years, but for now, I think, we have our hands full.

Kennen MacKay

Gotcha. Thanks, Amit. That's helpful.

Amit Munshi

Yes. Thank you, Ken.

Operator

Thank you. And there are no further questions in queue. That concludes today's question-and-answer session. I would now like to turn the call back to Amit Munshi for closing remarks.

Amit Munshi

Okay, great. So, again, thanks, everyone, for being on this call today. Our focus remains on executing across a broad range of programs I just mentioned. It's important that we continue to scale our company or to execute against these Phase 3 trails and timelines and a lot of great question on some of the protocols coming up and our ongoing regulatory interaction will be sure to get back to you with as much detail as we can as soon as we begin to lock down those protocol. So, I look forward to continue the dialogue and thanks again for your time today.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may disconnect. Have a great day.