With the finalized DEA scheduling in hand, Arena Pharmaceuticals (ARNA) was likely a very eager participant in the Bank of America Merrill Lynch 2013 Health Care Conference. The company spoke on May 15th and outlined some launch information relating to anti-obesity drug Belviq as well as some of the projects in the pipeline. At the moment the street is anxious about the Belviq launch and its level of success. Beginning on June 7th, the launch date, investors will finally begin to see whether or not Belviq will meet expectations and take its place at the top of the prescription anti-obesity market. I encourage investors to view and listen the presentation.

Marketing partner Eisai has given some indication that it is targeting $200 million in sales between the launch and the end of March 2014. That would indicate a drug that is not yet blockbuster ($1 billion in 1

After a few days of trading in a tight rage and with low volume, Sirius XM (SIRI) has made a sudden and bold move to new highs, and is making the move on higher than average volume. There is nothing Sirius XM specific that is driving the move. Rather, it seems to be a situation of some pretty fortuitous timing. Essentially, the Fed is pushing forth an agenda that the street likes. The market has been rising, and it appears that investors are finally stepping up to the plate to participate in the rally rather than be left behind.

The reason the timing for Sirius XM is so good is that the company is in the midst of a $2 billion dollar share buyback program. Activity such as this supports the current stock price, and at certain points helps to drive it as well. Combine this with a solid quarterly

It is no secret that about a year ago Vivus (VVUS) was expected to deliver a blockbuster anti-obesity drug, Qsymia, to the market. It is no secret that there are many, including some large institutions that invested into Vivus at levels substantially higher than the equity trades at today. Adding to the list, it is no secret that the launch of Qsymia last September was not at all what investors were looking for. Taking things a step further, it is no secret that even after six months the sales of Qsymia are far from a point where thinking about blockbuster status ($1 billion of sales in a year) is even realistic.

In response to many of these factors, a 10% stakeholder in Vivus, First Manhattan, has been highly critical of current management, has been vocal and public with its opinion, and has nominated a new slate of Board Members for

With Vivus' (VVUS) anti-obesity drug Qsymia having launched in September of 2012, and Arena's (ARNA) competitive solution Belviq set to launch next month there are many factors for investors to consider over the short and mid-term. One key item of consideration is off-label prescriptions.

An off-label prescription is a script written by a doctor that is not based on the FDA approval of that drug. A good example would be a doctor prescribing Arena's Belviq for controlling type II diabetes when in fact the drug is approved for anti-obesity.

Off-label prescriptions is not new. In fact, off-label prescriptions are written with great frequency. If a doctor feels that a certain drug will be helpful to a patient, even off-label, there is nothing to stop that doctor from pursuing that course of action. After all, a person's health is paramount.

Off-label prescriptions have had a lot of attention in recent years.

It was less than three months ago when privately held Slacker announced to the entire audio entertainment sector that it was the world's most complete music service and that it was poised to make some serious moves in 2013. The bigger players in the sector, Sirius XM (SIRI), Pandora (P), and Spotify may not have agreed, but in less than three months Slacker has put up some massive numbers.

Since mid-February, new users are coming to Slacker, they're listening longer, and they're also becoming paid subscribers:

• More than six million new listeners joined, with 3.5 million on mobile
• People have increased average listening time by 25 percent
• Slacker is now installed on more than three times as many iOS devices
• Rocking the charts, Slacker is consistently ranked among the top three grossing apps on the App Store Top Grossing Chart
• More than 100,000 new paid subscribers have joined

These

Vivus (VVUS) has had a challenging year. The company launched its highly touted anti-obesity drug, Qsymia, last September only to see sales numbers dribble in instead of the blockbuster sales some were anticipating when the FDA approval was announced earlier in the summer. Q4 sales revenue from Qsymia was just 2 million, and while Q1 of 2013 showed improvement to $4.1 million, the concern is that Qsymia sales can not muster the revenue needed to get to profits, let alone pay for additional studies.

Vivus management has tried to take steps to turn the story around, but as yet has not really been able to deliver the desired results:

• Vivus announced a price reduction in the form of a free trial in November of 2012
• Announced wider prescription coverage with an ExpressScripts deal in December
• Vivus announced a second price reduction of Qsymia in March of 2013

I have been saying for quite some time that while DEA scheduling was important to Arena (ARNA), it is the sales figures that will lead to movement in the share price of the equity. The reasoning is simple. Arena will now be making a big shift toward fundamental performance rather than simply being a pure speculative play. That does not mean that the speculative story for Arena is gone. It simply means that in the shorter and mid term we need to see sales to justify valuations that were speculatively applied over the past 10 months or so. Arena still has a pipeline of potential, but sales of the anti-obesity drug Belviq will be the key.

One reason that there has been a pause, and in my opinion a buying opportunity as the equity sits at about $8.00, is that the speculative phase of Arena set a very high

Arena (ARNA) has cleared the DEA hurdle that was the only item holding back the anti-obesity drug, Belviq, from launching in the United States. With final DEA scheduling Arena will soon be available for doctors to prescribe and patients to take. Belviq will join Vivus' (VVUS) Qsymia as the only prescription anti-obesity drugs on the market. Orexigen (OREX) has a third anti-obesity drug, Contrave, but it is still in the FDA approval process and will not be on the market for quite some time.

The DEA news has shot Arena up to about $8.40, just below the $8.50 baseline that I had established as a target for the equity when DEA scheduling finally came in. While the DEA approval provides a small catalyst, it is sales figures that will determine how strongly or weakly the equity moves in the coming months. The longer term has promise as well, but

Arena's (ARNA) Q1 conference call was anything but a success. With the anti-obesity drug Belviq still waiting on the sidelines until final DEA scheduling, the expectations regarding the quarter were not very promising. In fact, savvy investors were expecting a ho-hum call that offered little in terms of the fundamental story. The biggest hope was that the company would offer clarity on the DEA process and any progress in Europe. Investors have been expecting positive news from both of these government entities for months now.

Instead, what we got was a bomb dropped on us. In lieu of some clarity on when we might anticipate positive news out of Europe, we got the exact opposite. Arena pulled its application for marketing authorization in Europe. No one was really expecting that news Thursday, and the after hours action took Arena down an incredible 17% to $6.91. This is a

April auto sales are in and the headlines read that the SAAR for April shows, for the first time this year fell below 15 million. The industry reported SAAR for April was 14.9 million. While SAAR is a gauge that sector watchers use, it is actual sales numbers and not SAAR that impact Sirius XM (SIRI). The actual sales for April 2013 came in at 1,283,999 units. This was, as expected, less than March, but about 100,000 above April of 2012.

April, being the first month of the second quarter, is essentially a launch pad for the summer sales figures. May and June usually have sales that are stronger than April with May being the strongest month of the quarter.

What bodes well for Sirius XM is that Q2 auto sales are usually able to top Q1 sales by a good number. In Q1, the company added 453,000 subscribers. As

Arena Pharmaceuticals (ARNA) has taken a 15% hair cut on the day of its earnings release. While several numbers missed expectations, it can be explained away in the fact that the anti-obesity drug Belviq has yet to launch as it still awaits final DEA scheduling. What is likely the biggest driver of the sudden stock price decline is the fact that Arena has pulled its application for marketing authorization in Europe.

Investors once looked at Arena as having more potential than competitor Vivus (VVUS) because Vivus was rejected in Europe and many felt that European approval for Belviq was a sure thing. This obviously is not the case. A company does not pull an application if it believes it has a decent shot at approval at the current time. A company pulls an application because there is likely a fundamental issue that makes current approval unlikely. This news is a

Sirius XM (SIRI) recently held its Q1 conference call and announced at that call that the company has already repurchased 209 million shares of its equity. The news came as a surprise to many and the equity saw immediate price appreciation based on a solid quarter as well as the share buyback news.

In looking at the company report it became clear that Sirius XM had bought back these shares without having to dip into its $1.25 billion dollar credit facility. Seeing that raised a natural question in my mind. It was very apparent that the company can actually afford to to buy back more shares than the already announced $2 billion dollar program. In fact, it is my opinion that the company can still afford to buy back $2 billion on top of the approximately $650 million already spent. This would make the total buyback about $2.6 billion

Sirius XM (SIRI) is testing new 52 week highs after the company's Q1 conference call that offered up solid financials and a surprise in the form of some 209 million shares having been repurchased by the company. Sirius XM had previously announced that it would conduct $2 billion worth of share buybacks. Thus far it would appear that the company is about 30% complete on the share buybacks, having spent an estimated $640 million.

There are some interesting dynamics now for shareholders to consider. The equity moved up to $3.25 on about 125 million shares traded on the day of the conference call. Wednesday, on what is still above average volume, the company tested as high as $3.37. The big question for active traders is where the peak is in the shorter term, and where the equity will price out in the longer term.

The Shorts

What we could

Vivus (VVUS) has announced a new deal with Medco (MHS) that places the company's anti-obesity drug Qsymia in a status whereby the drug will get more insurance coverage. The essence of the deal is that Medco has now placed Qsymia into the tier 3 category, which allows for insurance reimbursement. Prior to this deal, Qsymia was uncovered.

The tier 3 status with Medco means that Qsymia can be covered by insurance as long as pre-authorization is obtained. With insurance footing part of the bill, Medco plan participants are now expected to have an out-of-pocket expense of between $50 and $60 per month. This deal is substantial in that Medco carries 38 million patients on its rolls.

This deal is not only a positive development for Vivus, but also for competitors Arena (ARNA) and Orexigen (OREX). Insurance companies that cover any one of these drugs will likely cover all three in

Sirius XM (SIRI) released its Q1 earnings today, and while the company is performing well, there is both some good and bad that transpired in the quarter. Overall, the quarter was good with a few surprises. The biggest problem is that some surprises were positive and others negative.

The Good

1. Sirius XM added 452,890 subscribers
2. Sirius XM had record revenue of $897 million
3. Adjusted EBITDA grew to a record $262 million
4. Sirius XM increased 2013 free cash flow guidance from $900 million to $915 million
5. Sirius XM bought back 209 million shares
6. Subscriber acquisition costs went down to $51

The Bad

1. Sirius XM saw quarter-over-quarter ARPU drop from $12.12 to $12.05. This is the second consecutive quarter we have seen ARPU decline
2. Sirius XM saw churn rise to 2.0%
3. Sirius XM's revenue was about $8 million below street expectations
4. Sirius XM missed street expectations on EPS by a penny,

Sirius XM (SIRI) is getting ready to announce Q1 earnings on Tuesday, April 30, 2013 prior to the market opening. The satellite radio provider is in a strong position, and thanks to good auto sales, should be able to announce some good numbers across the board. One problem that the equity has is that these good numbers are not only expected, but pretty much baked into the current price of the stock.

Sirius XM likely has little to offer in way of a surprise. That fact alone limits the upside potential of the stock. Instead of reaching up toward $3.50, we could simply see a day where the height of the conference call pop is in the neighborhood of $3.25 or so.

To be clear, the long term prospects of Sirius XM give plenty of reason to expect $3.75 to $4.00 during the course of the year, but the big

Arena (ARNA) will be hosting its quarterly conference call on May 2, 2013 after the market closes. It was anticipated that the Arena anti-obesity drug, Belviq, would have already launched by now, so while the importance of this quarterly report may now be ho-hum, there are some things that the company should spell out for investors.

Arena needs to put an end to the speculation side of the business when it conducts its conference call. The anticipation of final scheduling from the DEA, which would allow Belviq to launch in the U.S., combined with the status of Belviq in Europe have been speculative events that have gotten to the point of driving even the most ardent Arena investors over the edge. It has gotten to the point that conspiracy theories abound, and while Arena can likely not offer definitive answers, the company can certainly frame expectations such that some

Vivus (VVUS) received positive news in Europe on its erectile dysfunction drug Spedra. While Vivus has not seen favor in Europe or strong sales in the U.S. on its anti-obesity drug Qsymia, the Spedra news was enough to send Vivus up above $13 before settling back down to the high $12's.

The European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending the granting of a marketing authorization for avanafil, SPEDRA, for the treatment of erectile dysfunction (ED) in the European Union. With the positive recommendation in hand, the issue now moves over to the European Commission. That process is estimated to take as long as 60 days, but the toughest hurdle in Europe regarding Spedra is now behind Vivus. What is left at this point is pretty much a formality.

"We are pleased with the positive recommendation of the CHMP to

The short interest on Arena (ARNA) has been an interesting story for quite some time. While there are many that will consider a short squeeze a real possibility, the potential of one gets better when the days to cover the short position increase. With the latest short data, and thanks to lighter than average trading volume, the short story is once again getting interesting for savvy and active traders.

In the latest report, short interest actually went down while the days to cover increased. As stated, this dynamic is created by the recent low trading volume on Arena. Short interest went from 64.2 million shares to 62.3 million. The days to cover went from 9.08 to 16.76.

Regarding the short position, I am not a huge follower of the absolute number of shares short, but instead focus on the days to cover that position. The main reason I do not

Sirius XM (SIRI), the satellite radio provider has proven itself to be quite adept at bringing in revenue. The company now has yet another way to exact even more revenue. The beauty here is that for most consumers it will not even be felt.

A typical promotional subscription to Sirius or XM costs $14.49 per month. This subscription gives a consumer access to either Sirius programming or XM programming (depending on which radio the consumer has). There is an upgraded "All Access" package that includes what is essentially the "Best Of" the other service and also includes access to Sirius XM Internet Radio. The All Access Plan costs about $16.58 per month, or $2.09 per month more.

For quite some time, when a consumer buys a new car that is equipped with a satellite radio, they receive a promotional subscription to either Sirius or XM. These promotional subscriptions typically range