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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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  • Arena Hide-And-Seek 12 comments
    May 13, 2014 12:46 PM | about stocks: ARNA

    Sometimes management of a company has to be a bit coy for business reasons. I understand that. What I do not like to see is when a company plays hide-and-seek with certain things. The pathway on a decision for Belviq in Switzerland is something that I feel the company was being coy about. This makes trusting management more difficult.

    In the 10Q filed for Q2 of 2013 Arena stated this about progress in Switzerland:

    We intend to seek regulatory approval of BELVIQ in additional territories that are not currently under collaboration. Outside of our collaborations, we have a pending marketing authorization application, or MAA, for regulatory approval of BELVIQ in Switzerland. In February 2013, Swissmedic provided feedback to our MAA in the form of a list of questions with major objections. We responded to the list of questions in writing, and we subsequently received a preliminary determination from Swissmedic that those concerns have not been satisfied. We expect to continue discussions with the intent of addressing Swissmedic's concerns.

    In the Q2 conference call the company stated this:

    We also reported Swiss agency, Swissmedic communicated concerns in its Day 120 questions that were similar to those raised by the EMA. We have now received the preliminary determination from Swissmedic that the concerns have not been completely satisfied by our Day 120 response. We plan to continue regulatory discussions in order to address the Swissmedic's concerns.

    In the 10Q filed for Q3 of 2013 Arena stated this about progress in Switzerland:

    We have a pending marketing authorization application, or MAA, for regulatory approval of BELVIQ in Switzerland. In February 2013, Swissmedic provided feedback to our MAA in the form of a list of questions with major objections. We responded to the list of questions in writing, and we subsequently received a preliminary determination from Swissmedic that those concerns have not been satisfied. In collaboration with Eisai, we expect to continue discussions with the intent of addressing Swissmedic's concerns.

    In the Q3 Conference Call the company stated:

    Our interactions with Swissmedic continue as we pursue regulatory approval of BELVIQ in Switzerland. We will keep you updated on this process as appropriate.

    In the 10K filed for the full year of 2013 Arena stated this about the progress in Switzerland:

    With respect to Switzerland, Swissmedic provided feedback to our MAA in the form of a list of questions with major objections, which include objections that are similar to those identified with respect to our MAA for the European Union. We responded to the list of questions in writing, and we subsequently received a determination from Swissmedic that those concerns have not yet been satisfied and that our application would not be approved. While we expect to continue to work with Eisai to pursue regulatory approval in Switzerland, BELVIQ may not be approved for marketing in Switzerland when expected or ever.

    In the conference call Arena stated this:

    Beyond the U.S. market, BELVIQ is currently under regulatory review for marketing approval in Switzerland, Mexico, Canada, Brazil, and South Korea.

    In the most recent 10Q for Q1 of 2014 Arena stated this about progress in Switzerland:

    We also previously filed an MAA for approval of BELVIQ in Switzerland, and Swissmedic provided us feedback that included major objections that were similar to those identified with respect to our MAA for the European Union and determined not to approve our application. We expect Eisai to potentially submit for regulatory approval in Europe at a later date, but BELVIQ may not be submitted for regulatory approval in Europe when expected or ever.

    The company did not even bring Switzerland up in the conference call. Why is it that as an investor I have to play hide and seek with the company on an issue such as this? The company promised to keep investors updated on the progress as appropriate. Was a rejection in Switzerland not an event that investors should be updated about?

    The 10K was filed in March of this year. The company spoke to review for marketing approval in Switzerland just two months ago. Now suddenly we learn by digging through the 10Q that the Swiss have rejected Belviq.

    I am highly critical of this because it seems like the company is trying to duck the issue and not be forthcoming with information. The announcement of filing for application in Switzerland was seen as strong enough and material enough to generate the filing of an 8K in July of 2012, yet the rejection seems to be hush and swept under the rug of a ton of boiler-plate 10Q language.

    Yes, this is a rant. Why do I rant? Because investors deserve better treatment than this.

    Disclosure: I am long ARNA.

    Stocks: ARNA
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Comments (12)
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  • Mature 1
    , contributor
    Comments (46) | Send Message
     
    Sell the stock….then we can all rest.
    13 May 2014, 04:39 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (11919) | Send Message
     
    Author’s reply » Mature....

     

    Your resting depends on whether I own this stock or not?

     

    I currently have no real interest in selling but suggest that you simply rest.
    13 May 2014, 04:45 PM Reply Like
  • vitosoranno1
    , contributor
    Comments (1634) | Send Message
     
    Hi Spencer,

     

    Thanks much for bringing this issue to the forefront.

     

    Do you know whether there are any details concerning the reasons for the Swiss rejection? The reasons for the rejection would be important information for we shareholders to assess because it may have a bearing on the other pending approvals.

     

    Switzerland in itself is a small market so the rejection has minimal consequences as it concerns revenues. The real concern is company management not making the disclosure, as you so aptly point out. It is interesting to bear in mind that Belviq is being manufactured in Switzerland and one would think that this might give the drug a leg up when it comes to its approval. Belviq has been approved in the USA and thus far there are no reported major adverse reactions by users.

     

    However, I am now concerned with the viability of the applications in Mexico, Canada, Brazil, and South Korea. Weren't the Swiss and Brazil applications linked in some manner -- or am I mistaken?

     

    Thanks again.

     

    .
    13 May 2014, 05:43 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (11919) | Send Message
     
    Author’s reply » Vito....

     

    The reason for rejection in Switzerland was essentially the exact same concerns raised by CHMP for Europe. It was cancer studies, cardio studies, snd efficacy vs. benefit. You can refer to the quarterly of q2 and q3 of last year for more flavor.

     

    Brazil and the Swiss share data, process, and some inspection protocol. Rejection in Switzerland does not mean rejection in Brazil. However, you should assume that the Brazilians know of the Swiss decision.
    13 May 2014, 05:58 PM Reply Like
  • Mature 1
    , contributor
    Comments (46) | Send Message
     
    You keep looking for a reason to pump your ARNA position, trying to read between the lines of interpretation. Face the fact Qysima is a better drug with better efficacy than Belviq. That is a fact. Inarguable.
    13 May 2014, 10:44 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (11919) | Send Message
     
    Author’s reply » Mature....

     

    I have no desire nor need to pump anything.

     

    I do not really care for any of these drugs. In fact, none of them will ever enter my body. I also believe that the first course of action is PROPER diet and PROPER exercise. I have stated as much many times.

     

    It is also my opinion that a "better" drug will come along to outclass all three of the current contenders at some point.

     

    Better drug is relative. Depends on the person. For some Qsymia will be better. For others it will be Belviq. And for still others it will be Contrave. Then there are some that should not take any of them. Again, this has been my clearly stated stance for quite some time.

     

    Suggested reading does not have to be between the lines. Why don't you try reading my body of work prior to casting your judgement. I think you will find that I treat these all pretty equally.

     

    See, here is what is interesting.

     

    Many arena lovers call me an arena basher and a fan of vivus and orexigen

     

    Many vivus investors call am a vivus basher and a fan of arena

     

    Orexigen is still in infancy, so coverage is more sparse.

     

    When over-passionate investors in the respective equities have the exact opposite opinion, it tells me that I am pretty darn even handed.

     

    Try reading my coverage of the sector
    13 May 2014, 11:40 PM Reply Like
  • ControlledRisk
    , contributor
    Comments (343) | Send Message
     
    Yeah, this is not exactly, "Keeping me up to date on progress as appropriate."

     

    Thanks for figuring this all out.
    13 May 2014, 04:52 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (11919) | Send Message
     
    Author’s reply » Controlled.....

     

    No problem.

     

    Bad way to find out, but such is life. Arena, it appears, will not be very forthcoming with details
    13 May 2014, 06:02 PM Reply Like
  • jakes101
    , contributor
    Comments (1119) | Send Message
     
    Spencer,

     

    I'm a bit confused as to what it is that you wanted management to do in a situation like this. They are just doing their job. As is the case in every bad news situation... you play the important role of DAMAGE CONTROL. It is in writing, which is all that is required. It is deliberate, calculated damage control to keep calm and order. Nothing more to it than that. It is not a MAJOR game changer. Don't tell me you were surprised or shocked with the Swiss denial?

     

    You say investors deserve better treatment than this, but how many are truly upset with how they delivered the semi bad news to us. It is in writing and nothing is hidden, why announce it with a loud speaker. Even you mentioned that this approval/rejection would not have been a major catalyst to begin with, it's about sales here in the states.

     

    Also, keep in mind that Eisai is dropping substantial dough on these tv ads, and I'm pretty sure this played some kind of a role in the decision making. It is what it is!
    13 May 2014, 10:30 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (11919) | Send Message
     
    Author’s reply » Jakes....

     

    When companies play hide and seek like this is is often because they want to hide.

     

    Dodged the Swiss decision
    Dodged the insurance question
    Dodged the refills question
    Dodged the percentage of free trials question.

     

    There is a way to deal with each of these and the company failed on each of them. The Swiss news should not have been buried like it was. Plain and simple. File an 8 k, take the lump on the chin, and present the plan of action.

     

    Good companies can deliver bad news and quickly overcome it by outlining a course of action. If they felt this was coming, they should have withdrawn the application months ago, not string people along as if there was some chance of approval that was better than they saw in Europe.
    13 May 2014, 11:45 PM Reply Like
  • nai_kat
    , contributor
    Comments (11) | Send Message
     
    I agree with you Spencer, any good person would behave the way you are looking for, but CEOs of a billion dollar company may not. We have to deal with it I believe.

     

    I believe in one thing, whatever is happening is happening for good.
    14 May 2014, 11:04 AM Reply Like
  • nai_kat
    , contributor
    Comments (11) | Send Message
     
    Company may have made a deal with instituations or short that they will try to reduce retail trust on company so that they can cover or accumulate, so they did try to dodge this news?
    14 May 2014, 10:57 AM Reply Like
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