Can Arena Pharmaceuticals Inc.’s (NASDAQ:ARNA) Be Successful Globally?

Posted by Nathan Alexander September 30, 2013 0 Comment 3092 views


Arena Pharmaceuticals, Inc.’s (NASDAQ:ARNA) weight-loss drug Belviq has completed more than three months in the market now, and reports of the effectiveness of the drug has almost started surfacing. Belviq, a treatment option as a single agent for chronic weight management, is the first NCE approved by FDA for weight management in 13 years, according to the company.

If some media reports are to be believed then Belviq has shown some incredible results among patients who are taking the anti-obesity drug. A doctor, who practices internal medicine in Tucson, claims his patients taking Belviq are thrilled and are extremely happy to take this drug as they have lost a good amount of weight.

Belviq is not a fat burner, but it just reduces your appetite. The drug actually works as suppressant in your brain, instead of stomach, and lowers your cravings for food.

The company presented a corporate overview, including a Belviq launch update, at the Newsmakers in the Biotech Industry conference. In its presentation, Arena Pharmaceuticals, Inc.’s (NASDAQ:ARNA) said the company is planning to bring Belviq to additional markets globally. As part of its Belviq launch strategy, the company said they will also educate physicians who treat obesity about the effectiveness of the drug, among other customer awareness strategies.

Arena Pharmaceuticals, Inc.’s (NASDAQ:ARNA), along with Tokyo-based healthcare firm Eisai Co., Ltd, started offering a 15-day trial offer to attract obese customers. Now, they have also started direct consumer advertising and so it is expected to see more customers know about the product, resulting in revenue growth over the next few months.

When analysing, the most important guideline that can be seen on Belviq is that if a person does not shed upto 5% of their body weight within 12 week, then they should stop using the drug immediately, which means the third month could have been quite crucial to judge whether the product is effective or not. Now, this 15-day trial is followed by three more refills.

Analysing Belviq’s performance in the market and how it is going to reflect in the company’s balance sheet, Spencer Osborne in his Seeking Alpha article says:

“What investors care about is overall effectiveness considering how well the drug works at the prices it sells for. From an investor standpoint, a person that leaves because of cost is essentially a non-responder. This is where the insurance issue that I have been harping on comes into play. As insurance coverage rises, the company gets another shot at getting those drop-off’s back.

We want to see growth of new scripts, we want to see growth in refills, and we want to begin to understand the effectiveness from an investor’s standpoint. We also want to keep a tab on the clinical effectiveness. The reason for this is simple. More effective means more success. More success means more trust by doctors. More doctor trust means they will prescribe Belviq more often.

It is tempting to begin to look at simple week over week refill growth, see progress, and say that it is good. However, that is far too oversimplified. Early in a launch we can expect week over week growth on total scripts, so logic dictates that as larger and larger pools of potential patients graduate to trial patients, we will see growth in the refill rate as well.

As investors what we want to see is raw growth in refills week over week be as good as or better than the overall growth from the 4 weeks prior. Thus far, that is what we have.

This analysis may seem unconventional to some, but thinking outside of the box is how savvy traders and investors make money. While we have seen growth, the speed of that growth is slower than we want to see.”



About Nathan Alexander

Nathan Alexander holds bachelor’s degrees in Journalism and European Studies from Boston University. Nathan reports round up the day’s business and financial market news and include keynote interviews with major business players and updates on Asian, European and US stock markets. He has interviewed heads of leading European banking institutions such as European Central Bank President Jean-Claude Trichet and HSBC Chairman Stephen Green, and CEOs from the business world including Microsoft founder Bill Gates, Virgin Chairman Sir Richard Branson and former Porsche President and CEO Dr Wendelin Wiedeking.

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