Arena: The Belviq Launch And Why The Short Thesis Is Wrong [View article]
Yes. I have never written about the weight loss clinic aspect, interviews with the lead distribution network for phentermine to those clinics and leading bariatricians.
Your denial of the failure of Qsymia is mind-boggling? I recommended selling at $30 and again when it dropped under $20 saying it would go to $10. It did. I have also said many times why Qsymia would not be accepted in the market place.
I hope to get a new article up soon that will explain why Qsymia was dead in arrival and why the launch of Belviq will be different.
Will you hold this investment until it becomes a penny stock? Don't say it can't happen because it will if something doesn't miraculous happen soon and history shows that only 20% of new drug launches will increase their script rate after 6mo on the market. This new financing takes profit out of net sales and adds future pressure to their balance sheet but they probably had little choice.
Qsymia sales have now flatlined at 3,000 scripts a week for the last few weeks. If that trend continues then they will sell $20M worth in 2013, far less than the $300M some analysts forecasted 6mo ago, with operating costs exploding to over $200M this year. VVUS is a terrible investment and shareholders should have sold when insiders dumped their shares in 2012 before it hit the market.
Arena: Patience, Prudence And Planning [View article]
You cannot value ARNA without revenue, growth and profitability factors. Is a $1.8B marketcap too high, just right or too low? Analyst expectations call for $30M of BELVIQ sales in 2013. How many scripts is that? How many responders at 12 weeks is that? You can't determine this until you know what the price for the drug is. Valuation at pre-revenue is based on nothing more than conjecture. Why was HGSI and DNDN both over $6B prior to their lead drug launches? Now DNDN is worth less than $1B and HGSI got bought out at less than half their post-approval valuation. VVUS was worth $3B based on Qsymia expectations prior to launch. They sold less than $5M in 2012 (because of the reasons I've been stating for years,) yet the marketcap is still $1.2B (but will go lower IMO.) Until we have several quarters of sales for BELVIQ, you can't value the issue with any sort of conviction. On terrible sales, ARNA will do down to $1.2B in value or less (terrible sales mean scripts/growth that would indicate less than $30M in 2013.) On the flip-side, script growth showing $100M in 2013 (3X expectations) should increase the value of ARNA. Furthermore, with EU approval and partnership, script growth will indicate the likely revenue potential for 2014 & 2015 with more certainty so you can better determine future value. At $1.3B in global sales, Arena could earn over $2 a share making it as profitable as ALXN, a $19B marketcap company.
In my re-initiation of my ARNA investment in Sept 2011 with the stock at $1.25, I said ARNA was a never-expiring call option at that time. Only once Eisai/Arena releases 2013 guidance in May will we be better to judge the value, which will be confirmed by actual script numbers. Only then can you say if ARNA is a $4, $8 or a $80 stock. Prudent risk management and due diligence is always needed.
Excellent due diligence of how "Pump and Dumps," so typical of Small Caps, work. Regardless of whether or not the links were temporarily down (a poor excuse since this takes about 1min to fix and curious how quickly they returned after this article,) disruptive technology and IP are only good if someone actually buys it. Retail gets suckered into buying the next big thing only to watch the stock tank as the company burns through cash raised from overly-optimistic analysis.
No offense but using industry multiples for a pharma is not what one should expect in a high-growth biotech with a recently approved drug. A fair PE will be at least the overall revenue growth rate. It is not uncommon to see a PE of 80 or more for a biotech that is growing their revenue at 50% or more. It is the forward looking expectations of BELVIQ and the actual growth rates that will determine the multiple.
If ARNA earns .25 in 2013, is on track to earn .50 in 2014 and $1 in 2015 then you will see a share price that is 80X more than those earnings estimates IMO, certainly not 15-20. See VRTX, ALXN for examples.
Arena Breaking Out Ahead Of European Approval [View article]
1/15/13 Update: If Arena didn't file their Day 120 LoQ by Oct 12th, then the Day 121 clock may not have restarted until Nov 18. If that is the case, then Jan 17 would be Day 180 and the official opinion would not come until February and NOT this Friday, Jan 18th. There is just no way to know definitively until we see a PR out of Arena or the Meeting Minutes from the CHMP on their opinion...
Arena Breaking Out Ahead Of European Approval [View article]
Yes and that CVOT study will cost $200-300M to complete. Arena pays 10% of their study costs and Vivus pays 100% of theirs. Now tell me, if Qsymia sold $5M in 4mo, maybe they can do $50M in 2013 if they are lucky yet their Operating costs will be about $200M because of the increasing costs for sales, marketing and these post-approval trials. If Qsymia isn't a $200M+ drug in 2015, it would make no sense to continue with it financially. Just sayin.
Arena Breaking Out Ahead Of European Approval [View article]
And from Qsymia's Briefing Documents, average HbA1c reduction was .4 in their phase III trials (despite patients losing more weight than in Belviq's trials) compared to a reduction of .9 in the BLOOM-DM study. Not many Endo's are going to prescribe a phentermine-based drug to their diabetics regardless. They will be prescribing BELVIQ because it is twice as good at impacting HbA1c, Fasting Glucose and does not raise Heart Rate and does not need to be titrated.
Arena Breaking Out Ahead Of European Approval [View article]
I would suggest doing more research. Obesity specialists regularly prescribe phentermine off-label. Most prescribe phentermine 2X the starting dose and over 50% prescribe phentermine for long-term use. They regularly combine phentermine with other drugs such as topiramate. Obesity specialists are clamoring to try BELVIQ with phentermine off-label. This will not be done by cardiologists and endocrinoligists where raising HR (through phentermine) is more of a concern. We'll see how this plays out in another 12 mo or so...
Arena Breaking Out Ahead Of European Approval [View article]
The weekly script rate is currently 3,250 and not 12,978 (that is for 4 weeks in total.) This script growth is also likely to diminish once BELVIQ is available.
Arena Breaking Out Ahead Of European Approval [View article]
I'm referring to non-placebo adjusted HbA1c results which is a reduction of .9. There is no placebo in real-life weight issue but we can agree to disagree!
Arena Breaking Out Ahead Of European Approval [View article]
phemale60 - If BELVIQ was not likely to be approved by the CHMP next week, then there would almost certainly be an oral hearing requested and this is something that would have been disclosed by Arena. It hasn't been so it is reasonable to assume that no oral hearing is required or requested by Arena which leads to a high liklihood of approval -- something that is not fully built into the valuation.
I'm sorry you think I'm bashing VVUS but I am only attributing value to the "68% jump in script growth." In reality, that indicates about a 15% weekly script growth, a figure far below what is need to make Qsymia a blockbuster or even a $100M drug. Analysts already reduced their Q4 Qsymia expectations down to around $15M and Vivus delivered less than 1/3 of those reduced exceptions. That is the reality but good luck in your investment. Qsymia could be one of the 15% of drugs who improve their growth rate after 6mo on the market but I believe that is unlikely. Prescribers have never prescribed Phentermine & Topirimate together in mass quantity (like they did FenPhen,) and having a single pill in fixed dose form that costs 3X the generics is not a recipe for success in my opinion and this is playing out in the market results.
Arena NOLs Will Come Into Play Soon [View article]
Arena: The Belviq Launch And Why The Short Thesis Is Wrong [View article]
Arena: The Belviq Launch And Why The Short Thesis Is Wrong [View article]
Is It Time To Buy Vivus? [View article]
Your denial of the failure of Qsymia is mind-boggling? I recommended selling at $30 and again when it dropped under $20 saying it would go to $10. It did. I have also said many times why Qsymia would not be accepted in the market place.
I hope to get a new article up soon that will explain why Qsymia was dead in arrival and why the launch of Belviq will be different.
Will you hold this investment until it becomes a penny stock? Don't say it can't happen because it will if something doesn't miraculous happen soon and history shows that only 20% of new drug launches will increase their script rate after 6mo on the market. This new financing takes profit out of net sales and adds future pressure to their balance sheet but they probably had little choice.
Good luck to you.
Is It Time To Buy Vivus? [View article]
Arena: Patience, Prudence And Planning [View article]
In my re-initiation of my ARNA investment in Sept 2011 with the stock at $1.25, I said ARNA was a never-expiring call option at that time. Only once Eisai/Arena releases 2013 guidance in May will we be better to judge the value, which will be confirmed by actual script numbers. Only then can you say if ARNA is a $4, $8 or a $80 stock. Prudent risk management and due diligence is always needed.
Why Is Uni-Pixel Falling? [View article]
Arena: A Share Price Model [View article]
No offense but using industry multiples for a pharma is not what one should expect in a high-growth biotech with a recently approved drug. A fair PE will be at least the overall revenue growth rate. It is not uncommon to see a PE of 80 or more for a biotech that is growing their revenue at 50% or more. It is the forward looking expectations of BELVIQ and the actual growth rates that will determine the multiple.
If ARNA earns .25 in 2013, is on track to earn .50 in 2014 and $1 in 2015 then you will see a share price that is 80X more than those earnings estimates IMO, certainly not 15-20. See VRTX, ALXN for examples.
Arena Breaking Out Ahead Of European Approval [View article]
Arena Breaking Out Ahead Of European Approval [View article]
Arena Breaking Out Ahead Of European Approval [View article]
Arena Breaking Out Ahead Of European Approval [View article]
Arena Breaking Out Ahead Of European Approval [View article]
Arena Breaking Out Ahead Of European Approval [View article]
Arena Breaking Out Ahead Of European Approval [View article]
I'm sorry you think I'm bashing VVUS but I am only attributing value to the "68% jump in script growth." In reality, that indicates about a 15% weekly script growth, a figure far below what is need to make Qsymia a blockbuster or even a $100M drug. Analysts already reduced their Q4 Qsymia expectations down to around $15M and Vivus delivered less than 1/3 of those reduced exceptions. That is the reality but good luck in your investment. Qsymia could be one of the 15% of drugs who improve their growth rate after 6mo on the market but I believe that is unlikely. Prescribers have never prescribed Phentermine & Topirimate together in mass quantity (like they did FenPhen,) and having a single pill in fixed dose form that costs 3X the generics is not a recipe for success in my opinion and this is playing out in the market results.