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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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  • Anti-Obesity Drugs And Refills

    It seems that there are a group of investors in Arena (NASDAQ:ARNA) are an interesting bunch of people. I have not seen so many offer quite as much spin as this group. It is a fascinating dynamic. Last year when I began to outline the cash situation and point to a possible need for cash, I had some in this group slam me at every opportunity stating the there would not be a need to raise cash. Now, after the dilution has been announced, these same people herald that the company is cash rich and in a better place than ever. It is simply amazing.

    The latest to take the cake is Arena investors discussing Orexigen and Contrave.

    On one hand they say that the Contrave launch looks better than it is because of titration and how patients need to take Contrave. On the other hand, at just 13 weeks into launch, they say that refills are poor.

    Guess What....

    You can not have it both ways. If you want to argue that two new scripts are used because of titration, you can not then argue that refills are lower than they should be. It simply does not work that way. Regardless of that, we are just barely getting to the stage where refills can be assessed. If you believe the two new scripts mantra, we are still a few weeks away from getting to the point where refills can be assessed.

    Why is it that this group of Arena investors spends so much time applying spin?

    I am invested in Arena and can readily say that Contrave has had an impressive launch and in fact, has a trajectory that is quite impressive.

    There are 52 weeks in a year, and I am convinced that this group of arena investors can find 52 excuses as to why sales are slower than they need to be.

    • a holiday
    • bad weather - people stayed in
    • good weather - people went to the beach
    • mediocre weather - people ran other errands
    • samples are taking from sales
    • doctors were at conferences
    • Macy's had its red tag sale
    • Macy's had its white tag sale
    • JC Penny had a mothers day sale
    • It is graduation and people are preparing for that
    • The hedge funds are manipulating patients
    • The 4th of July
    • Labor Day
    • Memorial day

    The list goes on and on. Here we are, 20 months into a launch, with scripts at about 11,500 and people are still offering up excuses. These are the same people that felt Belviq would already be at Blockbuster status. Heck, one MD, even seeing everything he has, thinks that 3.5 million scripts is in the cards in 2015!

    Here is the reality. Arena needs to get to $35 million in revenue this year. They need to sell about 1.5 million scripts to do it. They need to do this despite the weekly sale at Macy's and despite everything else. If the pace is not going to deliver these numbers, then there are problems. It is really that simple.

    Contrave has had a great launch trajectory. Why are some so afraid to say it. Heck, Contrave may be catching up in sales numbers by mid year....after all, they will have the ability to sell in Europe. Why is it that this particular group of Arena investors is so enamored that they can not see reality?

    Fascinating indeed.

    Disclosure: The author is long ARNA.

    Tags: ARNA, OREX
    Jan 23 5:00 PM | Link | Comment!
  • Belviq Extended Release

    The concept of Belviq Extended Release may be more valuable to investors than many consider. If the extended release formulation is in the form of a capsule, it may become more difficult for consumers to take a half dose. This could bode well for sales because it means that people that currently take only one pill a day instead of two will not really have that option be so easy anymore.

    There are consumers that simply take one pill a day rather than two. This means that they effectively cut the cost of Belviq in half. A capsule would make that task much more difficult. This would mean that people would be back to paying for the medicine every month instead of every other month.

    The concept of less pills has already had an impact on Belviq sales. Right now, the average duration on the drug appears to be less than three months. This data is based on a consumer taking two pills per day. For every consumer that takes only 1 pill per day, the average duration of use appears to go lower.

    Another more obvious benefit to investors is an extended patent life. The extended release would garner a new patent and with it new time-lines of patent life.

    Just a little food for thought.

    Disclosure: The author is long ARNA.

    Tags: ARNA
    Jan 16 11:07 AM | Link | 2 Comments
  • Belviq And Smoking Cessation

    Arena (NASDAQ:ARNA) announced today that the company anticipates enrolling another phase 2 trial for smoking cessation in mid 2015. This would mean that results of such a trial would be mid 2016. At that stage, if results are good, the company could file for approval.

    Essentially a smoking cessation indication for Belviq will be late 2016 or early 2017.

    Disclosure: The author is long ARNA.

    Tags: ARNA
    Jan 14 7:14 PM | Link | 2 Comments
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