Obesity Investor 2009 promises to be a banner year for playing the obesity space, and, let's hope, fattening our wallets in the process. Obesity Investor looks at a number of different obesity plays. We are agnostic as to market cap, we are free from advertising and we fully disclose any relevant stock ownership.
As many of you have heard, obesity has become epidemic in the U.S. and costs our economy over $100 billion a year by some estimates. Also, baby boomers are getting older and heavier.
Then why pay attention to obesity now? Well, there's a lot going on. There's the three-way horse race among promising small-pharma companies bringing new late-stage (Phase III) anti-obesity drugs toward NDA submissions planned for late 2009 and early 2010: Arena Pharmaceuticals (ARNA), Vivus, Inc. (VVUS) and Orexigen Therapeutics (OREX).
Everyone seems to agree that in obesity, the time to seek partners is after Phase III data has reduced the risk. With Big Pharma famously cash-rich and pipeline-poor, and the obesity candidates of such players as Merck (MRK) having crashed and burned for psychiatric side-effects, we expect to see partnering action heating up in the weeks to come.
Small pharma investing tends to mean taking a view on binary events. The FDA will eventually greenlight one or more of these drugs, or it won't. If that's not your style, then we'll look beyond pharma. Weight Watchers (WTW), eDiets.com, Inc. (DIET), Medifast, Inc. (MED) and NutriSystem, Inc. (NTRI) all offer opportunity to invest in weight management.
For the strong of stomach -- or those who believe in investing counter to the economic cycle -- retailers such as Casual Male (CMRG) and Charming Shoppes (CHRS) cater to plus-sized shoppers, and JC Penney (JCP) is well-known among people who wear extended sizes (or whose children do) for carrying an extensive, moderately priced line.
We'll bring our perspective to all these names in a way that only an independent voice does. In late 2007, when the share price of NTRI was sliding, many of the big-name analysts tried to tell you that this showed competitive pressure from alli. Last summer, when alli sales had fallen off dramatically, we went back and graphed the price of NTRI shares against sales of alli. Surprise -- no NTRI rebound, implying no relationship.
That's the kind of analysis we are proud of, and intend to keep bringing you at Obesity Investor. For now, we are free for all to view, but you have to put up with an ad that keeps flashing pictures of Sarah Palin (I don't control it). Check back for analysis of quarterly reports from VVUS, OREX and ARNA, and (hopefully) much more.