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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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  • How Many Free Belviq Scripts Are There? 6 comments
    Aug 4, 2014 3:47 PM | about stocks: ARNA

    One burning question that many people have is how many free trial scripts exist in the sales numbers for Belviq. Try as we all might, there is simply not enough data to answer the question, and both Eisai and Arena are not too forthcoming.

    Here is an interesting look at this issue. We know from the Eisai quarterly call that free scripts increased 200% since the ad campaign started. We know that the ad campaign started on April 14th (essentially the beginning of Q2). We know that 77,000 scripts were sold in Q1 and that 110,000 were sold in Q2. Now the fun.

    • If we assume that in Q1 15% of the scripts were free, that would give us 65,450 paid scripts and 11,550 free scripts.
    • If the scripts increased 200%, then the 11,500 would be 34,650 in Q2.
    • If 34,650 scripts were free in Q2, then that would leave 75,350 as paid.
    • The revenue for paid scripts in Q1 was $2.7 million. If we divide that by the 65,450 we arrive at about $41.25 per paid script
    • The revenue for paid scripts in Q2 was about $3.1 million. If we divide that by 75,350 we arrive at $41.17 per paid script..Essentially in the same neighborhood.

    Thus, the percentage of free scripts to paid scripts would have gone from 15% in Q1 to about 30% in Q2.

    Just a shot at looking at this considering the statement made by Eisai that the freebies have gone up 200%. Any comments?

    Disclosure: The author is long ARNA.

    Stocks: ARNA
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Comments (6)
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  • daxtrdr
    , contributor
    Comments (294) | Send Message
     
    Spencer, from my other post:

     

    2nd Qtr
    $400,000/.315 = 1,270,000/($90/2) = 28,000 vouchers

     

    1st Qtr
    200,000/.315 = 635,000/($109/2) = 11,650 vouchers

     

    This is considering all reimbursements to be for the free 15 day vouchers, not including the savings card. Is the savings card money reimbursed?

     

    Anyway, I think maybe the second quarter figure should be lowered based on the lowered amount of reimbursement per script. Then we would be right on.
    4 Aug, 04:04 PM Reply Like
  • daxtrdr
    , contributor
    Comments (294) | Send Message
     
    Spencer, misstatement on my part. Lowering the amount would have the opposite effect. We'd be further apart on Q2.

     

    Do you know if the savings card money is reimbursed?

     

    Thank you.
    4 Aug, 04:57 PM Reply Like
  • Spencer Osborne
    , contributor
    Comments (7669) | Send Message
     
    Author’s reply » dax....

     

    The savings card money seems to be purely an eisai function.
    4 Aug, 05:02 PM Reply Like
  • jakes101
    , contributor
    Comments (786) | Send Message
     
    The data are there to answer the question, it's just that Arena and Eisai would rather not share at the moment. They know the freebie count to the last bottle, but perhaps it is in the best interest of all investors to release that info in due time. Can you really blame them?
    8 Aug, 01:45 AM Reply Like
  • Spencer Osborne
    , contributor
    Comments (7669) | Send Message
     
    Author’s reply » jakes....

     

    One big issue is that the street is trying to gauge the sector. Having an understanding of the insurance coverage, freebies, etc. allows the street to make better assumptions, model better, and keep expectations real.
    8 Aug, 08:54 AM Reply Like
  • Sedric
    , contributor
    Comments (803) | Send Message
     
    Yes you are in the ballpark. There is abandonment too. Those who received an RX but never filled it due to cost. That is an important metric not discussed by ARNA which looks at the sensitivity of cost to actual filling an Rx a Dr. wrote. That abandonment effects Dr's views and likelihood of bothering to write future RX"s too, IMO
    10 Aug, 08:38 PM Reply Like
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