Seeking Alpha

Spencer Osborne's  Instablog

Spencer Osborne
Send Message
Spencer Osborne is founder of Satellite Standard Group [SSG], and a partner of Sirius Buzz ( Sirius Buzz covers the satellite radio industry as well as companies that do business in this sector. Sirius Buzz provides information and opinion to readers with an interest in... More
My company:
SiriusBuzz Premium
My blog:
View Spencer Osborne's Instablogs on:
  • Belviq And Growth

    Sometimes it amazes me that people will send off a communication regarding a subject matter without really thinking things through. This is a comment that came out:

    "Belviq sales will be over 50,000 scripts per week by June. The word is getting out. A prominent doctor scripting Belviq is seeing great success with Belviq solo and BelPhen. He states that 25% are great responders and their success will take this viral. If each person tells 10 people, this will be huge! People are talking about it and it is only a matter of time. Sales are up 80% since the beginning of the year according to Eisai rep."

    I want to break this down into a few points.

    1. There may be a time when scripts get to 50,000 per week, but thus far it has not been demonstrated that the current pace will get us there.

    2. A prominent doctor may be seeing success. However, if 25% see great success, and trial data suggests about 50% as responders, then we can assume that 25% see moderate success, and 50% see no success. Personally, those that have success could spread the word, but those without may do exactly the same. Let's look at an example.

    We will assume 10 patients to start

    • 3 patients (rounding up from 25% to 30%) will see great success. Their testimony will be glowing
    • 2 patients will see moderate success. Their testimony will be okay.
    • 4 patients see no success. Thier testimony will be that it does not work
    • 1 patient will see no success and have an adverse event or side effect. thier testimony will be damaging

    The 3 patients that saw great sucess will each tell 10 people. In this group of 30 people, 9 will see great success, 6 will see moderate success, 12 will see no success, and 3 will have a bad side effect experience.

    The 2 patients that saw moderate success will be decently positive, but not overwhelmingly so. Thus, let's assume they tell 10 people, but only half of those they tell react. That would mean 3 people would try and have great success, 2 people would have moderate success, 4 people would have no success, and 1 person would have a bad side effect. 10 people are indifferent and simply do not try.

    The 4 patients with no success would tell 10 people each that Belviq does not work. Let's be generous and say that 10 people out of those 40 try the drug. 3 will have great success, 2 will have moderate success, 4 will have no success, 1 will have a bad side effect, and 30 are indifferent and will not try.

    The 1 patient with a bad side effect will tell 10 people who will not try.

    In just one step of the "going viral chain" there will have been 10 original patients and 100 "recruits" for a total of 110 people.

    • 18 out of the 110 will have "great success"
    • 12 out of 110 will ahve moderate success
    • 24 will have no success
    • 6 will have a bad side effect
    • 40 people are indifferent after being told.
    • 10 received bad word on the drug and will not try

    Now think about this....Which category is most likely to "go viral"?

    The last item about sales being up 80% is interesting. It is a classic case of salesmanship. It is a "sort-of-true statement. If you take sales of 7,700 at Christmas week and multiply by 1.8, you arrive at about 13,900. Sales last week were about 13,200. It is really a case of selecting the data to suit a desired result. Sales have been pretty flat for about 20 weeks, but comparing the most recent scripts to the low point will look impressive.

    The bottom line is this. Keep expectations real. Your wort enemy is setting lofty expectations that the odds are stacked agaist. While we would all love to see this go viral, we have to have a part of us grounded in reality.

    Tags: ARNA
    Feb 24 11:01 PM | Link | 2 Comments
  • Pharma Investors Should Read This

    Simple and straight forward. If you are invested in Pharma you should read The IMS Global Medicines Outlook.

    Feb 08 6:20 PM | Link | 3 Comments
  • Vivus Up On Label Modification In Europe

    Vivus (NASDAQ:VVUS) stock was up news that its erectile dysfunction drug Spedra can now be marketed as having a 15 minute onset in Europe. Spedra is marketed as Stendra in the United States and already has the 15 minute onset approved by the FDA.

    Vivus launched the anti-obesity drug Qsymia in 2012, but obesity pill sales have been more sluggish than anticipated and the company has not had a marketing partner for Qsymia. The story differs with Stendra and Spedra. Vivus partnered with Auxilium Pharmaceuticals for North America. Menarini has the partnership deal Spedra in Europe, while Sanofi carries the deal for Africa, the Middle east, Turkey, and Russia.

    In Q3 of 2014 Vivus recognized $15 million in license and milestone revenue in connection with Stendra and Spedra. The company also realized $5.3 million in supply revenue and another $1.05 million in royalty revenue. Investors are betting that Vivus' erectile dysfunction drug can help deliver quarterly numbers that will impress the street.

    At this stage Stendra and Spedra are not widely marketed in the same way that we see advertising for Viagra and Cialis. The overall erectile dysfunction expected to be a $4 billion dollar industry by 2014. Tapping into just a portion of that market could mean that Vivus has a potential blockbuster on its hands.

    In Q3 of 2014 Vivus showed revenue of $33.9 million and a loss of just $7 million for an EPS of ($0.15). In Q4 the street is estimating a loss of ($0.25) per share on revenue of $20 million. If Vivus has a surprise it will come from the erectile dysfunction market because script sales of Qsymia were only modestly up.

    In my opinion the street understands the money flow of Qsymia very well, but does not yet have a grasp on how the revenue story of Stendra and Spedra really stack up. If a marketing campaign can boost Stendra and Spedra, Vivus could chip away into the market share of the traditional E.D. drugs Viagra and Cialis.

    Vivus needs to see Stendra and Spedra deliver. If that can happen, the street may begin to appreciate the company more. Thus far the Qsymia story has been somewhat lackluster and the stock suffered because of it. Stay Tuned!

    Tags: VVUS
    Jan 30 11:45 AM | Link | Comment!
Full index of posts »
Latest Followers


More »

Latest Comments

Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.