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For quite some time investors in Arena Pharmaceuticals (NASDAQ:ARNA) have been investing on the potential of its weight loss product Belviq to be a successful anti-obesity drug. There indeed has been plenty to be excited about. After all, Belviq was the first prescription weight-loss product to pass FDA muster in the last decade, and in general people are heavier now than they ever have been. There is a lot of potential for Arena to be successful. Still, there was no real yardstick by which to gauge the level of success that could be attained.

As I was getting ready to head to the office this morning I found myself contemplating expectations vs. reality. Many times, with no yardstick to measure with, we are left to just our imagination. Whether we mean to or not, our imagination is capable of painting a picture that leans to either very good or very bad. There is often not much in the middle. Further, if we WANT things to be good our imagination will take us there. When I close my eyes and imagine my life, it includes a 5 bedroom 4 bathroom house on a well maintained piece of property instead of an Upper East Side apartment that costs $3,000 per month! Get the point? My imagination seeks perfection, while reality and life oft differ from what is imagined.

As I left the apartment and headed to the 6 train, as I do every day, I found myself looking at all of the people I passed and noting their physical condition. I was gauging whether or not Arena's Belviq would be a product that they would benefit from. While far from scientific, I noted that out of 131 people I passed about 16 were what I would consider obese. Suddenly the size of the Belviq market begins to take shape, if only by an unscientific approach. If just 1 out of those16 were to seek treatment, that would be only one person out of 131. That is less than 1%! Do you see the problems the imagination can cause you?

If only we had a yardstick! A way to measure the potential success of Belviq that was based on data and facts rather than imagination. I am not talking about FDA studies or market research here, but rather a real world look.

While the real world measuring stick has been elusive, it is coming by way of Arena competitor Vivus (NASDAQ:VVUS). Vivus also gained FDA approval for its anti-obesity drug Qsymia, and is now on the market here in the United States. In contrast Arena and Belviq are still awaiting a DEA schedule before it can hit the pharmacy shelves.

While there is a passionate group of investors in Arena and Vivus that seem to love to hate the other company, the reality is that if the market for such drugs is successful, both companies can thrive. Set aside the trial data, the method of prescription, the side effects, and everything else for a moment. That is all great fodder for message board debate, but does not really tell us if success is at hand or not. What can begin to tell us the all important level of success is how Vivus' Qsymia performs in actual sales and in actual use. The yardstick to measure potential real world results is finally here!

Whether the passionate Arena fans realize it or not, the success of an investment in Arena is currently tied to the real world level of success in Vivus and Qsymia. If you are an Arena investor you are likely routing for Vivus success. While that may seem a foreign concept to some, it is the new reality that you should understand and grasp sooner rather than later. In actuality you should embrace the news of Vivus with more attention than you ever did before!

The DEA scheduling for Arena's Belviq could be as much as two months away. The product is not likely to hit market until Q1 of 2013, and even if it gets to market prior to that we likely will not have any data to work with until late in 2012. In the meantime, Qsymia is on the market and news about that drug will be crossing the wires on a regular basis. It is Vivus news that will help to set the reality stage for Arena in the next couple of months not Arena executives saying that they are still awaiting DEA scheduling.

Simply stated, if Vivus and Qsymia can be a success in the real market it would tend to indicate that Arena and Belviq can be as well. The more of a splash Vivus makes, the more of a splash we can anticipate for Arena. The beauty here is that Vivus is providing a real yardstick by which Arena investors can measure the potential of Arena.

Some early data is already available and Vivus will likely be speaking about Qsymia several times prior to Arena launching Belviq. Investors can use the data of Vivus to measure the real world potential of Area's Belviq. It does not matter if you think Arena's Beliviq will be more or less successful that Vivus' Qsymia. The point is that you will have real SALES data to work from, and it is SALES data that will drive the price of either equity.

Source: Setting Expectations For Arena Pharmaceuticals

Additional disclosure: I have no position in Vivus