Consumer watchdog pursues Arena Pharmaceuticals, Inc (NASDAQ:ARNA)
The consumer watchdogs are it again and this time their target is Arena Pharmaceuticals (ARNA) and Belviq, its anti-obesity drug. An article that was published on 13 June on Consumerreports.org advised consumers to look for an alternative to Belviq. The article is not particularly unique but states that it is preferable to choose the path of exercise and a proper diet to lose weight instead on relying on weight-loss drugs such as Belviq or Qysmia. The FDA had approved the latter last year.
Nothing new about it
The article said that the benefits of these drugs are minimal in comparison to the side-effects that they have. Watchful and conscientious investors, who have added a frown to their brow with this news, need not really worry too much. The stance that has been taken on Belviq is a very commonplace one. Very few doctors would recommend a pill where exercise and diet can do the trick. Another thing to keep in mind is that though there is definite cynicism about weight-loss drugs in the report, there is a large segment of the population who actually benefits from them. And that segment is BELVIQ’s target market.
The truth of the matter
What is commendable is that on launch day, both Arena and Eisai stated that Belviq has been designed for those who are unable to commit to an appropriate diet or an exercise regimen and the road is bound to be a pot hole-riddled one. If the product is really an excellent one it will find a way to navigate those potholes. Another consideration is that a report such as the one that features in Consumer Reports is sure to be used as a tool by various active traders and the company has several of those. As an investor, you should be watching the sales bar and that will be true test of the equity, and not just consumer reports or shorts or longs.