Spencer Osborne's  Instablog

Spencer Osborne
Send Message
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
My company:
SiriusBuzz Premium
My blog:
  • Belviq And Glycemic Control 3 comments
    Jun 24, 2014 12:24 PM | about stocks: ARNA, VVUS, OREX

    It seems that some have gotten relatively excited about a recent article published On The Clinical Advisor relating to Belviq and glycemic control. The article was published on June 21st of this year. The subject caused a lot of discussion on a recent article of mine and I was asked if this "new news" would have an impact on the equity.

    My general response was no. The reason is that while this article may be "new", it is simply covering a subject that was widely adressed almost 2 years ago. The best example I can muster is a scene from Dumb and Dumber where the character Lloyd walks by a framed article about man walking on the moon.

    I do not do this to be-little anyone, but rather to point out that there are things that are new and deserve excitement and attention, and things that are old, and do not bear the same level of attention.

    I look at Arena in terms of it being an equity. Just because a handful of investors get excited about something like the article in The Clinical Advisor does not mean that the street will react. The fact of the matter is that what was written in The Clinical Advisor was covered in much greater detail almost two years ago when the results of the Bloom DM trial were published.

    "Although the study was not designed to optimize or evaluate glycemia primarily, approximately half of the patients assigned to lorcaserin achieved the recommended HbA1c level of <7% (25), almost twice the rate observed in the placebo group. Whether the improvement in glycemic control can be attributed entirely to weight loss is unclear since antihyperglycemic medications could be adjusted after the 12th week of the trial. Data generated using transgenic rodents have led to speculation that 5HT2c agonism may modulate glycemia independent of body weight. Additional experimentation would be required to determine whether lorcaserin exerts effect ts on glycemic control that are independent of weight loss."

    From an investment standpoint, the Clinical Advisor article is essentially meaningless. From a corporate standpoint, neither Arena nor Eisai have taken any steps to demonstrate that glycemic control is in fact attributable to Belviq regardless of weight loss. One main reason for that might be that such a trial, at this stage, carries not real demonstrable benefit to the company or the progress of Belviq.

    Pre-diabetes is something that we all classify and are now aware of. It is essentially your doctor telling you that you are approaching the danger zone of diabetes. More often than not, the simple fix to that is eating right, getting the proper amount of exercise, and losing some weight. Eating right and getting exercise are preventative lifestyle changes. Losing weight may happen as a result of lifestyle changes. Improving your glycemic levels is a likely result of these changes. Certainly some people may need help losing weight and a pill may assist in the process.

    Again, the point here is not to minimize the importance of good health and the concept that a pill can help someone get there. In my opinion one very smart reason that Arena and Eisai are focused on smoking cessation is that the best results in stopping progression to diabetes are tied to weight loss. In that forum, there are other products that demonstrate more weight loss and better results on progression from pre-diabetes to diabetes.

    Another comment in a recent article went down the path that patients on Belviq were 39% less likely to progress to diabetes. The person was very excited about this and extrapolated this "news" as something that would propel Arena stock upward.

    Yes Spencer, BELVIQ is in a class of its own. Now, I am think out loud with the scheduled Diabtese presentation

    What if BELVIQ becomes widely known that Belviq has the ability to reduce pre-diabetics risk of becoming a diabetic by 39% and that Belviq 10mg daily can reduce HbA1c for existing diabetics better than any other oral diabetes drug? Think about it.

    Diabetes and weight loss go hand in hand. Is there any doubt this is the largest market opportunity in the pharmaceutical industry. BELVIQ will be a first-line treatment for the prevention of diabetes and weight loss.

    Now, I will say that a 39% reduction is wonderful. However, is the overall conclusion by this person realistic? On the same day that Arena presented its information relating to a reduction in progression to diabetes, Orexigen and Vivus also presented. Orexigen has a focus on diabetes as well, and Vivus presented slides showing a 70.5% rate on mid dose and a 78.7% decrease on high dose.

    (click to enlarge)

    In addition to that data, Vivus presented the ACCE Algorithm with regard to treatment. Notice how the graphics on the poster are presented.

    (click to enlarge)

    Now, clearly I am not a doctor, but I can see that in terms of treating progression of diabetes, the numbers favor Qsymia. That being said, the weight loss attributes of these drugs would also favor Qsymia. That does not mean that I feel Qsymia is better. In many ways, the safety and side effect profile favor Belviq. The decision about which drug should be used is one between a doctor and a patient. The point I am making here is that what an investor feels is "huge" for the company they are invested in could also be "huge" for another company. In my opinion this is exactly why the strategy to go to smoking cessation is very wise and prudent.

    The road for gaining acceptance for anti-obesity drugs has been long and hard. The road to seeing a pill used to treat "pre-diabetes" will be hard as well.

    At this juncture, it is my opinion that the "pre-diabetes" data, while anecdotally good, is not yet something that will drive these equities. The pathway is easier if the concept is marketing it as a treatment for those that already have diabetes, BUT, all of these drugs will be entering a highly competitive space in trying to market that way. be patient, and be cautious not to get caught up in hoopla that is really old information that has been re-presented.

    Disclosure: The author is long ARNA.

    Additional disclosure: I have no position in Vivus or Orexigen

    Stocks: ARNA, VVUS, OREX
Back To Spencer Osborne's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (3)
Track new comments
  • Spencer Osborne
    , contributor
    Comments (12016) | Send Message
    Author’s reply » Dax....


    The dumb and dumber comment assessment was not meant for you, but rather the likes of Babs.
    24 Jun 2014, 01:01 PM Reply Like
  • daxtrdr
    , contributor
    Comments (473) | Send Message
    Thank you for that clarification. I should also say that my Andy Dufresne reference was off base. Just wanted to try to get you a little motivated ;-)
    24 Jun 2014, 06:54 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (12016) | Send Message
    Author’s reply » Dax...


    Lol...no worries. Cheers!
    24 Jun 2014, 11:30 PM Reply Like
Full index of posts »
Latest Followers


More »

Latest Comments

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.