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Spencer Osborne
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Spencer Osborne is founder of Satellite Standard Group [SSG], and a partner of Sirius Buzz (http://siriusbuzz.com/). 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
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  • Belviq FDA Adverse Events Q4 Of 2014

    As many readers know, reporting of adverse events is typically 6 months behind. The adverse events list for Q4 of 2014 were just published. Belviq had 562 events in the quarter on sales of about 144,000 scripts. Qsymia had 173 on sales of 137,000 scripts. Contrave, which is in its first quarter of reporting, had 10 adverse events reported on sales of about 39,000 scripts. In Q3 of 2013, Belviq had 301 events on sales of about 143,000 scripts.

    The ratios in Q4:

    • Belviq had 1 adverse event for every 256 scripts
    • Qsymia had 1 adverse event for every 792 scripts
    • Contrave had 1 adverse event for every 3,900 scripts

    The most common adverse events for Belviq were:

    • Headache - 106 reports
    • Drug Ineffective - 96 reports
    • Fatigue - 96 reports
    • Dizziness - 73 reports
    • Nausea - 46 reports
    • Weight Increased - 39 reports
    • Dry Mouth - 23 reports
    • Intentional underdose - 21 reports
    • Somnolence - 21 reports
    • Constipation - 19 reports
    • Drug Effect Decreased - 18 reports

    The data this quarter also included one death of a 46 year old female, one disability, and 5 instances of hospitalization.

    While Belviq does carry the perception that it is safest, it does have the most reported adverse events with the FDA. This could be attributable to many things, chief of which, as a new drug, it is monitored closely by doctors, etc. and the fact that Eisai and Arena have an ongoing CVOT trial with a substantial number of patients. This would mean that Eisai has a very direct connection to that pool of patients, and adverse events within the trial get reported along with the standard level of reports from doctors and insurance companies. While there are many reports from Eisai, many of the reports are generated by consumers, which could indicate a lack of understanding about potential side effects before taking the drug.

    The number of adverse reports for Belviq grew from Q3 to Q4 by a decent margin, while the number of scripts only increased by about 1,000. Stay Tuned!

    Tags: ARNA
    Jul 09 1:02 PM | Link | Comment!
  • Anti-Obesity Drugs Not Sticky Enough

    I have received a few communications about my assessment that the new anti-obesity pills are not sticky enough. One individual stated that he was not sure what I meant by sticky and then went on to arrive at the conclusion that stickiness had nothing to do with the situation. The obvious question is this...If you do not know what I meant by sticky, how can you then arrive at a conclusion that has any meaning?

    When a product is sticky it means that people keep coming back to it once they try it. Sticky is a term used throughout many business that sell products. If an item is sticky, a person will keep buying it. If it is not sticky they will not keep buyiong it.

    Example

    You buy a new car and get 3 months of SiriusXM Satellite Radio. If the programming on satellite radio appeals to you, then you subscribe for a longer period of time. For you the product is sticky. Another person may not like the programming, or may not drive a lot, or may feel that $15 dollars a month is too expensive. For that person the product is not sticky.

    How do we measure the stickiness of satellite radio? We take the number of free trials and see what percentage of them move on to become self-paying subscribers. For SiriusXM, that number is about 40%. Satellite radio is sticky for 40% of those that try it.

    Now, once a person is a self-paying subscriber, we can measure how sticky the product is with that group. Sirius XM has churn of about 1.8% of its self paying base each month.

    The dynamic is therefore this:

    • 100 people try it
    • 40 keep it
    • each month that passes will see 1.8% deactivate.

    The oversimplified math is this:

    • Month 1 - 100 people get free trial - 100 total subs in free trial
    • Month 2 - 100 people get free trial - 200 total subs in free trial
    • Month 3 - 100 people get free trial - 300 total subs in free trial
    • Month 4 - 100 people get free trial, 60 drop off from month 1 group - 300 people in free trial, 40 people in self-pay - 340 total subs
    • Month 5 - 100 people get free trial, 60 drop off from month 2 group, 1 person churns from month 1 group. 379 total subs.

    In general, satellite radio is stick enough that it has now amassed over 25 million subscribers.

    With the anti-obesity drugs, what we are seeing is that people tend to only be on them for 2 or 3 months. This was never the plan of these new anti-obesity drugs. The concept was that people that were responders would stay on the drug for a long period of time. This is not happening. Let's look at Belviq specifically.

    Back in January, Arena disclosed that 275,000 patients had tried Belviq. At that point in time, the number of scripts sold was 575,000 according to IMS. That meant that the average person was on the drug about 2 months regardless of Schedule IV drug refill rules, etc.

    The stickiness of Belviq is that the average person will take the drug for two months. What is important to investors is why.

    • Is the cost too high?
    • Is it effectiveness?
    • Is it side effects?
    • Is it a lack of understanding on how the drug is supposed to work?

    Those that follow the sector closely know and understand that these drugs help to take off weight, and that remaining on them can help to keep that weight off. If a patient stops taking the drug, they may well gain back their weight, whereas, if the patient keeps taking the drug, they can maintain the weight levels they have seen success with.

    Those that follow this sector also know that the bulk of weight loss happens in the first 12 to 16 weeks. After that, the weight loss plateaus. If you think about how these drugs work, you will see that this makes perfect sense. These drugs make the brain feel that a person is full. Simply stated, the control and/or suppress appetite. In an oversimplified example, if a person ate 5,000 calories a day and only burned 2,000, they will gain weight. If a person eats 2,000 calories a day and burns 2,000, they will maintain weight. These drugs essentially limit the amount of calories, or more accurately, the size and amount of food consumed. If a person wanted more weight loss than they achieve on the pill alone, they can increase exercise, improve diet,m or better yet, do both.

    Now, we know Belviq works in half of the people that try it. If the drug were sticky with this half, they would be long term users. We also know that the "trial" period of this drug is 12 weeks. If a person has not lost 5% in 12 weeks, then they should cease. In a perfect world we would not have people stopping after a 15 day trial, 1 month, or two months. In essence, the baseline of stickiness should be 3 months. Think about it. Each person that tries the drug should try it for three months (in concept).

    Personally I suspect that the issue of Belviq not being sticky is mostly cost, then effectiveness (half will drop because it is not working for them) then education (understanding a plateau and understanding the benefit of staying on the drug to keep weight off), then safety.

    Of the items that relate to stickiness, Arena and Eisai can control 2 of them and has no control over 2 of them. The two that can be controlled are cost and education. In my opinion, the education aspect is where I see the most trouble. Consider the average person:

    The average person goes on a diet and losses some weight. They then stop what they were doing and over a few months put the weight back on. They then say that the diet worked for a bit, but then they gained the weight back. The average person will take Belviq for 3 months, lose weight, and be happy until month 4. They then see weight loss plateau and feel that the drug is not working. They stop, say that the drug worked, but eventually they put the weight back on.

    The bottom line is that currently these drugs are not sticky enough. There are way to many people leaving these drugs way to quickly. It is critical that the education happen, because once a person tries and fails something, they are usually not likely to go back and try again.

    One communication stated that the refills will always be around 3.5 months. This is not true. In fact, it is the furthest thing from the truth. Math dictates that the given parameters of how this drug works, that the pool of long term takers will increase with each passing month. The education is the key here. The sooner that message gets implemented the better.

    Tags: ARNA, OREX, VVUS
    Jun 08 2:10 PM | Link | Comment!
  • Some Stuff

    When someone writes about equities, there will always be groups of people that disagree with what is written. Those that are long an equity will celebrate anyone that pumps up the stock, tells wonderful stories, or presents the positive story. If a writer has the nerve to offer critical analysis, he or she will never be "loved" by the longs in the crowd.

    What happens to a writer that dares to be real and objective? What happens to a writer that presents the good and the bad? They get attacked, and sometimes in ruthless fashion. Most attacks can simply be dismissed. There is a moron out there that runs around saying that I have a "mail-order wife" despite the fact that my wife was born in the United States, and her family has been in this country for GENERATIONS. That person is likely seen as a moron by any reader, but these things still happen.

    Others criticize in any way they can. They call me a moron, they say I am stupid, they say I am a basher, a pumper, or something else. These types of attacks are not kind, but are not really illegal either. They come with the territory. Often times, the more attacks there are, the more it points to the correctness of what I am writing. These attacks are typically conducted by anonymous message board posters and really pose no major issue.

    Then we have those that enter the category of Slander, libel, and deliberate character assassination. These people are not always anonymous. They prop themselves up over time, they lay out a resume of what they are and who they are. They identify themselves as DOCTORS, LAWYERS, BANKERS, etc.

    One Investors Village message board poster seems hell bent on insinuating that I am "Chaz". I am not. He/she seems to feel that I have a relationship with "Chaz". I do not. He/she seems to think that I somehow am involved in whatever "Chaz" is posting. I do not. It appears that this person seems to feel that if I am not "Chaz", that I am someone else on the message board.

    Let me make this perfectly clear. Further, think for a moment the risks I would be taking if what I am about to say is in any way untruthful. I would be a fool to post what I am about to post if it were not true:

    1. I do not post on any message boards.

    2. I do not direct anyone to post on any message boards.

    3. I do not give anyone information to post on message boards.

    4. I do not know who "Chaz" is and to the best of my knowledge, have never had dialogue with "Chaz". I say to the best of my knowledge because I have no idea if "Chaz" has ever commented on any of my articles under some other name.

    5. If I were to post on the Internet, or anywhere regarding equities that I cover, I would do so under my own name it make it crystal clear who I am.

    6. I believe that it is unethical for a writer to participate in message board postings. I believe it is even more unethical of a writer were to do so under a name that is different from the name they use when writing.

    Over the years, I have found that there exists a group of people that "bought the hype" and invested into an equity. As time passed, and the company did not live up to the hype, these people will live in denial and try to find anyone or anything else to blame. Hedge funds, competition, government red tape, the shorts, the options markets, and yes, even writers that cover the sector. Many of the entities that blame is cast upon are things that can not really be quantified or identified. Writers typically see the brunt because they have a name and thus are "easy targets".

    I really have no problem with criticism. Particularly if it is fair. I have no problem with someone disagreeing with me. I have no problem with spirited discussion and debate. I do take exception to those that will engage in slanderous and libelous behavior.

    It is kind of funny. Some will say i am biased because I own stock in a company. Others, at the same time will say that I do not really own shares, or only own a few shares so that I can "say I am long". Still others will say that I am bashing while I will simultaneously be accused of pumping. It is actually pretty amazing.

    In closing, people will say what they are going to say, and do what they are going to do. Some people will exist at a higher level of intellect and keep things where they should. the rest are just scum, and will usually be addressed in a manner that they have the best shot at comprehending.

    Cheers

    Tags: ARNA, VVUS, OREX
    May 10 5:57 PM | Link | 1 Comment
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