With the recent tumble in share price of both Arena Pharmaceuticals (ARNA) and Vivus (VVUS) have announced earnings calls for November 6, 2012. For Vivus the call will be prior to the market opening at 8:45 AM, and for Arena the call will be after the market closes at 5:00 PM.
What I find most compelling is that these calls will have little to do with the financial information of each company and more to do with news surrounding the anti-obesity drugs of each company. For Vivus the story will be the initial results of sales on Qsymia, and for Arena the status and likely timeframe for a launch of Belviq.
In many ways the market will not care about the current quarter as much as it will news regarding the drugs. Vivus will have had its drug Qsymia on the market for about a month and a half with no real official announcements by the company regarding early sales data. With Vivus announcing before the market opens, I see this as a sign that positive news may develop. It should be enough to stop the recent slide in the equity price and reverse the course to positive gains in the stock.
While it may seem odd, Arena will be a play on any Vivus news. The more positive the Vivus results are regarding Qsymia, the better things will be for Arena as it is staging a product launch of Belviq. If Vivus is showing good traction, I anticipate both equities reacting strongly.
In a nutshell, I see both Vivus and Arena seeing at least 10% gains on the conference calls and more if the sales data of Vivus's Qsymia are stronger than anticipated. For Arena the key element will actually be to build on the Vivus news and try to target an anticipated launch. Arena's Belviq is awaiting DEA scheduling. The drug was submitted to the DEA for scheduling about 5 months ago, and once Belviq receives its DEA schedule it can launch for sales in the U.S.
Next week will be an interesting one for both companies as well as those invested in them. I see a quick 10% pop in the making!
Disclosure: I am long ARNA.