It has been a process, but sales of the anti-obesity drug Belviq from Arena Pharmaceuticals (ARNA) have hit sales milestones according to IMS Health as well as Symphony Health. According to IMS, weekly sales have gone over 5,000, while Symphony data shows sales at over 6,000. Both reporting companies show sales eclipsing a new 1,000 increment. IMS showed sales for the week ending 11/22 at a bit under 5,300 and up just under 7% when compared to the previous week. Symphony sales for the same week were a bit under 6,200 and up just over 6% from the week prior.
Sales for the anti-obesity drug have shown continued slow improvement since launch, but have lagged expectations set out by the street as well as informal "guidance" set by marketing partner Eisai (OTCPK:ESALY). That being said, this is a slow period of the year for weight loss, and advertising has just recently started. In addition, the sales force for Belviq is now doubled from the 200 reps that were representing the drug at launch to 400 that will be representing the drug moving forward. It is also anticipated that more aggressive advertising will come into play as 2014 arrives.
One key element that active traders and investors need to be aware of is that the sales data that will be reported this week will be down. The numbers that come out on Friday, December 6th, will include Thanksgiving week. With Thanksgiving on Thursday, and many people traveling on Wednesday and Thursday, we should anticipate a very weak number. The first thing to remember is that the number this week will be an anomaly. The second thing to remember is that Thanksgiving, along with Christmas, will take about 1.5 to 2.5 weeks out of the sales numbers for the quarter. That will impact numbers. Therein lies an opportunity.
By understanding the sales dynamic weekly, an investor that has the data will carry an advantage. The sales for the remainder of the year may not be pretty, but the potential that will be forming as 2014 comes into play will show, at a minimum, some impressive growth.
Consider the traction it has taken to break through and remain above each 1,000 block threshold (using IMS data):
1,000s - 2 weeks
2,000s - 4 weeks
3,000s - 12 weeks
4,000s - 5 weeks (it will dip down again for Thanksgiving)
The importance here is that we are seeing some traction taking shape. Going from 12 weeks to navigate through the 3,000 block to 5 weeks in the 4,000 block illustrates traction. This coincides with a greater awareness that advertising brings. Yes, Thanksgiving will create a lull, but that is the opportunity. We can see that advertising is carrying an impact. We can see that more and more doctors are scripting the drug. Add more sales people, and roll out a more aggressive ad campaign and we can have something special. In addition, consider that Arena now has a more willing partner in Eisai with the announcement of what essentially equates to a world-wide deal instead of just the Americas.
What we want to see through December is that script levels grow from the pre-Thanksgiving week at a minimum of a modest pace to close out the year. If we see that, then the potential effects of more reps, advertising, and perhaps better insurance formularies will start off 2014 in a great direction. That being said, investors still need some caution. The prescription anti-obesity space has still not yet proven itself as something that will go viral. Let's expect decent and steady growth rather than a rocket ship. If you frame your expectations correctly, you can be a more savvy investor.
Look for opportunity in the next few weeks with the swings on the script numbers. Frame your expectations correctly so that you do not catch yourself in a trap of expectations that are too robust in the near term. Understand that additional reps and advertising will take time to impact the numbers. Stay Tuned!
Additional disclosure: I have no position in Eisai.