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Arena's (NASDAQ:ARNA) February 2013 commercial launch of Belviq is quickly approaching, its partner Eisai's seems to be ready to hit the ground running. The DEA placed Belviq in a schedule IV classification allowing physicians to liberally prescribe Belviq to patients by fast electronic script through local pharmacies for a three-month supply (90 pills) at a time.

Eisai is evidently chomping at the bit ready to launch. On December 19, 2012, Eisai wrote the DEA citing exceptional circumstances exist related to the obesity epidemic to immediately grant a final order at the end of the notice period (January 18, 2013):

"For the reasons described above, Eisai, Inc., respectfully requests that the DEA upon finalizing the proposed rule, make effective the date the same date as the publication of the final rule. This would enable physicians and their patients to have access to Lorcaserin as soon as possible in this area of growing unmet medical need. The Administrator has included an earlier effective date in the final rule for other drugs. Such precedents include zopiclone (70 Fed Reg 63 (April 4, 2005), pregabalin (70 Fed Reg (July 28, 2005), ezogabine (76 Fed Reg. 241 (December 15, 2011))."

In researching this issue, I discovered the DEA has never turned down this kind of request, especially under these well-grounded exceptional circumstances. I expect the DEA to grant Eisai's request and Belviq will be available in local pharmacy's by February 7, 2012, considering the average time it normally takes for the DEA to grant such a request.

Legally, Eisai can market Belviq already because the FDA approved the drug. Normally, however, the pharmaceutical company waits for a DEA final order to make sure the marketing inserts reflect the proper drug classification. Eisai has an existing sales force in place, already marketing to physicians, as evidenced by some of the physicians I surveyed who have indicated Eisai sales representatives called to inform them Belviq, a new revolutionary weight management product, will be available in February 2013. Internet posts have already experimented with catchy marketing slogans- "Belviq will make you chic/sleek."

Eisai has confirmed that Belviq is being loaded in drug store databases at many major pharmacies, such as CVS, and will soon be ready for distribution. Additionally, major group and individual health plans have already begun to cover Belviq. Aetna and Blue Cross plan to cover Belviq. Arena's CEO Jack Lief hinted that Belviq's price should be approximately $3.80 per day, using the two-pill daily dosing measure. Personally, I would pay the price of a Starbuck's Latte when one considers the health benefits for weight loss, biomarkers, diabetes and pre-diabetes that Belviq may offers patients. I would imagine most health plans will eventually follow Aetna and Blue Cross the significant improvement in biomarkers (.9 HBA1C).

In addition, Belviq is very close to European Medicine Agency approval. I expect Belviq will receive a positive CHMP review by the first week in January, 2013. In anticipation, investors have debated why Arena has not partnered Belviq. The obvious reason is Belviq is certain to fetch a better price upon EU approval. I confirmed with Arena that they are in active discussions with several potential EU partners and will provide an update upon EU approval. Whenever the EU approves Belviq and/or Arena partner's Belviq in Europe, the news will certainly give Arena's share price a boost.

It is becoming evident that the market for Arena's drug and Eisai's ability to deliver on sales is currently being underestimated by analysts and Wall Street alike as Arena closed on December 21, 2012, in regular session trading at $8.65, which is at it's 50 day EMA and nearly 36% below it's 52 week high. I suspect Wall Street's general "show me the money" sentiment towards Arena will change once institutions and hedge funds begin factoring in EU approval and track Belviq's US weekly prescription data.

With plenty of cash on hand, zero debt, no meaningful competition, new indications, milestone payments, Belviq combinations to pursue, and growing partnership deals, Arena appears to be in the driver's seat and in complete control of its destiny. Provided that their sales and marketing strategies are well executed by marketing powerhouse Eisai, there seems to be little to stand in the way keeping them from becoming a successful commercial enterprise and providing shareholder value for many years to come. I rate the stock a strong buy ahead of these catalyst.

Source: Arena's Marketing Partner Eisai Pharma Seeks Expedited Final Ruling From DEA To Begin Belviq Sales