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Arena Pharmaceuticals (NASDAQ:ARNA) and partner Eisai (OTCPK:ESALY) launched the anti-obesity drug Belviq in June. Sales started off better than competitor Vivus (NASDAQ:VVUS) with its drug Qsymia, but were lower than the high expectations that were placed on the company. Arena stock has suffered since the launch, but with direct to consumer print ads starting in September, and a rumored doubling of the sales force, perhaps brighter days are ahead.

Two weeks ago I wrote an article featuring Novo Nordisk's (NYSE:NVO) diabetes drug Victoza and a television ad campaign that I found was quite creative in letting the audience know that Victoza can help patients lose weight. Novo Nordisk is working on entering the anti-obesity market because a side effect of taking Victoza for diabetes is weight loss. I found the television ad as a creative way to shift the focus off of the big message (diabetes) and make consumers aware that the drug can help people lose weight. The fact that Novo is making a point to feature weight loss could be indicative that the sector carries great potential. Players do not enter markets unless they see potential there.

This week I tip my hat to Arena and Eisai. The first round of print ads were essentially boiler-plate legalese. While these types of ads do have a purpose, they lack any real sex appeal and do not grab consumer attention. The latest installment of Belviq ads (in magazines like People) is much more consumer centered. Pictured in the ad is an overweight lady walking. Her shadow casts onto a white fence, and within that shadow are phrases like "Type 2 Diabetes", "High Blood Pressure", and "High Cholesterol". Under it all the tag line says, "You could be carrying more than just extra weight". The ad is brilliant, and for investors is a sign that Eisai, the company that is marketing the drug, is willing to take the concept of weight loss beyond the obvious.

(click to enlarge)Belviq Ad

The image above is just a small part of what is a two page spread which includes a discount card. The fact that a 15-day free trial is available is mentioned prominently at least 3 times. These are all great, but consider the image above and the genius within it.

  • The woman is overweight, but it is not difficult to imagine her in a thinner state. The selection of this model was quite smart. While it may seem better to use a heavier person, there is importance in allowing potential consumers to identify with the product. Someone that is heavier can identify with the model, as can those a bit lighter. This model does not make it seem impossible to lose weight.
  • The ad shows exercise. The woman is out for a walk. The action is demonstrated in the swing of her arm. A static image of an overweight person simply demonstrates an overweight person. This walking model demonstrates healthy choices as well as exercise. Healthy choices help make Belviq effective, and weight loss can help with other conditions.
  • The shadow in the ad with the phrases gets a consumer to consider that added weight has many impacts on health. This ad points out that getting control of weight can mean that you are getting control of other factors as well. It is something that would seem to be common sense, but surprisingly, many are not aware of the connections. This ad demonstrates the more hidden conditions that extra weight bring on.
  • The white picket fence is another great touch. Not only is it a great backdrop for the shadow, but it makes the model pop out on the page. Taking it a step deeper, the "American Dream" is a nice house, a yard, and yes...a white picket fence. The clean fence and landscaping show the "perfection" we all seek.

While it is exciting for investors to see these ads, let's not get ahead of ourselves. Advertising is a process. What we now see is that the ad campaign has a direction. The first ads were "boring" and lacked sex appeal. They simply put out the name. This round of ads bring a personal touch into the equation, and broach the subject of improvement in much more than just weight. As someone invested in this, I love the fact that the progression has happened in just a few short weeks. It gives a sense that the advertising will be more than just a single ad run over and over again and rather a coordinated campaign. I am eager to see the next phase, and eventually the television ads.

With Arena stock just above 52-week lows, many investors are trying to figure out where the bottom is. Weekly scripts need to improve, and ads will help. Remember, this is a process and the reaction to ads may not be immediate. By example, even after seeing thousands of Geico car insurance ads, I am still not insured by them, and in fact have never called them. The free trial mentions in the Belviq ads will be a catalyst to at least get someone thinking about calling a doctor or trying it out. I look for script improvements to happen over time, and that perhaps the degree of the sales pace can improve over the next several weeks.

Bear in mind that this is a stock that is actively traded, and script numbers are still the driver. There could be an inflection point soon, but there are hurdles that remain. We will likely see down weeks with Columbus Day, Veterans Day, Thanksgiving, and Christmas. In addition we have the Q3 conference call to deal with. The Arena story is shaping up, but the exciting part of it may be a 2014 event. Investors looking to get into this equity will want to watch the volume and see the negative trend reverse into a positive one. There is a lot to watch and monitor, so the key is to "Stay Tuned".

Source: Arena Pharmaceuticals - Belviq Ad Gets More Creative

Additional disclosure: I have no position in Vivus, Eisai, or Novo Nordisk