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I have been trading equities since 1998. Currently a full time endodontist in NYC.
  • Arena Vs. Vivus- A Big Decision 18 comments
    Jun 14, 2012 3:36 PM | about stocks: ARNA, VVUS

    How would you play the market once Lorcaserin and Qnexa get FDA approval? Lorcaserin is up for approval on the 27th of this month and Qnexa is up for approval July 17th. They are two obesity drugs set to hit a multibillion dollar market at the end of this year. Lorcaserin is on track to be approved first without any delay like Qnexa. The reason for the delay in Qnexa is because Vivus was asked over a year to provide a REMS to the FDA but they only submitted two weeks prior to approval not giving the FDA enough time to sort through it. Arena was never asked to do any REMS and they have been working closely with the FDA the past two years to satisfy any concerns they might have. If the FDA has any concern with Lorcaserin, they would have addressed it by now. Upon approval, I would go long on Arena (NASDAQ:ARNA), the maker of Lorcaserin since it is the safer of the two and short Vivus (NASDAQ:VVUS), the maker of Qnexa. Why would I say such a thing when Qnexa has a higher efficacy for weight loss than its competitor Lorcaserin? Well, there are many issues with Qnexa that do not look as great in the real world as opposed to on paper.

    1. Side effect- The biggest concern for the FDA is the birth defect associated with Qnexa. This is the reason for the 3 months delay given by the FDA so they can sort through the REMS submitted by Vivus. Due to this side effect, Qnexa cannot be prescribed to women of child bearing age. Lorcaserin on the other hand can be prescribed to anyone since it does not have any negative side effect. This will give more revenue to Arena and less revenue to Vivus.

    2. Benefit vs. Risk- Supporters of Qnexa will argue that Lorcaserin has low efficacy for weight loss and thus, physicians will have to prescribe Qnexa once patients do not lose the weight. This is going to be a costly mistake. Don't forget, Lorcaserin is a novel drug and Qnexa is a combination of two drugs. Combination always have better efficacy. Doctors like my brother and I will never prescribe Qnexa or any other drugs with serious side effect when there is an alternative with less risk. No doctors in their right mind will risk getting sued. Physicians will prescribe Phentermine, one of the two drugs in Qnexa, on top of Lorcaserin to give a bigger punch if needed without the negative risk. This will reduce the amount of revenue from the left over population even more.

    3. Insurance coverage- Insurance will pay for Lorcaserin since it's a novel drug with benefits that can save them more money in the long run. However, insurance will probably not cover for Qnexa since it is a combination of two generic drugs. They will have the doctors prescribe the two generics instead. This will deter patients from taking Qnexa and go with Lorcaserin.

    Remember how Dendreon's Provenge was approved and the stock shot up to $50/share based on its benefit on paper. Well, after miserable sales due to the high cost of treatment, the stock dropped to $6/share. Don't let the benefit on paper fool you when it comes to the real world. Do your own due diligence on these two drugs and see how they will generate revenue since that will dictate the price of the stock.

    This is just for entertainment and not a recommendation to buy or short any stocks. Never invest more than you can afford to lose. I am long ARNA.

    Disclosure: I am long ARNA.

    Stocks: ARNA, VVUS
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Comments (18)
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  • BrandonUK07
    , contributor
    Comments (121) | Send Message
     
    Nice analysis and I agree with a lot of what you've stated. However, I don't believe physicians should start prescribing lorcaserin plus phentermine until more studies have been done. I would cosnider it malpractice to do so otherwise as there is currently NO data on this combo. Additionally, there would have to be a compeling obesity case to warrant both of those drugs in combo without any sort of studies for safety being studied. I think this is what the FDA may actually be afraid of and one of the physicians brought that up at ADCOM that spoke as part of the public.

     

    Lorcaserin is the more safe option and should be option number 1 if both are approved. However from my experience I believe you may be a little too optimistic with insurance coverage. Phentermine is not covered by most plans and it's cheap ($20-30/month) and Xenical (orlistat) also has poor coverage. In order for coverage to begin we would need some sort of economic cost savings study supporting the idea that lorcaserin lowers health care spend (I believe it may). If coverage is initiated I'd suspect insurance companies to require a prior authorzation which would ask for BMI and previously tried therpy and probably ask for a prior authorzation follow-up in 6 months.
    14 Jun 2012, 09:34 PM Reply Like
  • -synthesis-
    , contributor
    Comments (2) | Send Message
     
    I am also a physician.

     

    I disclose that I am long ARNA.

     

    It is interesting how Vivus longs are out of touch regarding Qnexa liability. I guess they have never been the a defendant in a malpractice lawsuit.

     

    Given that a large percentage of obese patients are women of reproductive age, the risks are high. First off, women need to be on contraception. If oral, there are risks of DVT and PE (death).

     

    If it is an IUD, there is a risk of lost/expelled IUD or malpositioned IUD. I have seen unintended pregnancies due to the above. Just imagine if that happened and there was a birth defect. By sheer number of patients, this is bound to happen.

     

    I can only imagine the lawsuit for an unwanted complicated pregnancy. Multimillion dollars for lifetime care right there, let alone pain and suffering.

     

    Why would I want to chance that for a few more percent of weight loss? Then there is the valvulopathy risk.

     

    I think physicians will choose Lorcaserin as first line. Only with select motivated, compliant, and refractory patients, would there be an extensive discussion of the risks and benefits of Qnexa. I would probably discuss Qnexa as an option along with a discussion of Lap band, gastric bypass, and sleeve gastrectomy risks and benefits.

     

    I guess, physicians are the only ones who can really appreciate risks and benefits of managing patient diseases.
    14 Jun 2012, 10:53 PM Reply Like
  • ATLnsider
    , contributor
    Comments (48) | Send Message
     
    Drendo4u,

     

    There are a lot of inaccuracies in your blog comments.

     

    First, you stated: "Lorcaserin is on track to be approved first without any delay like Qnexa".

     

    However, several analysts who follow the pharmaceutical drug industry are all on record stating that there is a possibility that Lorcaserin could be delayed due to:

     

    (1) the FDA needing to approve the design of a post-approval cardiovascular outcome trial (CVOT) prior to Lorcaserin being approved; and/or

     

    (2) the FDA needing to approve REMS for Lorcaserin prior to approval of Lorcaserin.

     

    I do admit that a Lorcaserin delay has not happened yet, but there is still time for this to happen. As of today, there are still 13 days before June 27th. Qnexa was not delayed until 9 days prior to its previous PDUFA date of April 17th.

     

    Second, you mentioned that: "Vivus was asked over a year to provide a REMS to the FDA but they only submitted two weeks prior to approval not giving the FDA enough time to sort through it"

     

    That statement is not true. Vivus did submit a REMS proposal to the FDA all the way back to its first NDA submission on July 10, 2010. Take a look at pages 17 and 159 of the 2010 Vivus Qnexa Adcom briefing document. Here is the link:

     

    http://1.usa.gov/MUpkBv

     

    Also, on February 22, 2012, Vivus submitted an updated REMS proposal with their 2012 Vivus Qnexa Adcom briefing document. Take a look at pages 3 and 145. Here is the link:

     

    http://1.usa.gov/HORACN

     

    The truth is, Vivus and the FDA have been discussing a REMS program for Qnexa since 2010. Vivus submitted a comprehensive Qnexa REMS proposal with both its 2010 and its 2011 NDA submissions and Adcoms. After the FDA Qnexa Adcom on February 22, 2012, the FDA asked Vivus to update its REMS proposal to incorporate some of the comments and suggestions made by the FDA Advisory Committee. Vivus did update and revise its Qnexa REMS proposal and it was submitted to the FDA on April 4th.

     

    Third, you stated: "I would go long on Arena (ARNA), the maker of Lorcaserin since it is the safer of the two and short Vivus (VVUS), the maker of Qnexa".

     

    However, the blanket statement that "Locaserin is safer", without and proof or basis, is not justified. Based upon the comments of the FDA Lorcaserin Adcom panel, and the FDA staff, there were several adverse events could not be ruled out with Lorcaserin. Lorcaserin may require annual echocardiograms for all patients, to monitor and check for heart damage. Lorcaserin may require multiple registries to monitor for: brain tumors, cancers, and valvular heart disease (VHD).

     

    Lorcaserin has the following "KNOWN" risk factors that have not been ruled out:

     

    (1) brain tumors

     

    (2) cancers

     

    (3) valvular heart disease (VHD)

     

    (4) neuro-psychiatric cognitive disorders

     

    These are just the currently known risk factors. Because Lorcaserin is so new, and untested and unproven in the general population, in about 5 years, we should learn what the currently "UNKNOWN" risk factors and side-effects are for Lorcaserin.

     

    Fourth, you said: "Qnexa cannot be prescribed to women of child bearing age. Lorcaserin on the other hand can be prescribed to anyone since it does not have any negative side effect. This will give more revenue to Arena and less revenue to Vivus".

     

    However, that is not true. Qnexa will be prescribed for women of child-bearing potential (WOCBP), but it is contra-indicated, and will not be prescribed for pregnant women, or women who are planning to become pregnant. But, pregnant women should not be prescribed any weight loss drug, including Lorcaserin.

     

    As a matter of fact, Vivus was going to restrict access to Qnexa for WOCBP, but the FDA asked Vivus to remove this restriction so women of child-bearing potential could have access to Qnexa. This is the quote from page 188 of the 2012 FDA Qnexa Adcom briefing document:

     

    "The applicant resubmitted the application October 17, 2011. The applicant proposed to mitigate the risk of teratogenicity by contraindicating use for women of childbearing potential (WOCBP), and implement a Risk Evaluation and Mitigation Strategy (REMS) using restricted distribution to enforce this contraindication. The Agency believes the contraindication is too broad, and does not agree that, should Qnexa be approved, the risk of teratogenicity would outweigh Qnexa’s benefits for every woman capable of becoming pregnant"

     

    Here is the link:

     

    http://1.usa.gov/I2Q78C

     

    Fifth, you stated: "Physicians will prescribe Phentermine, one of the two drugs in Qnexa, on top of Lorcaserin to give a bigger punch if needed without the negative risk"

     

    But, as you know, the combination of Lorcaserin and Phentermine (Lor-Phen) is not FDA approved. As a result, it will need to undergo years of pre-clinical and clinicial trials and studies to test on animals first, then test on humans. These studies will take several years, and will cost tens or hundreds of millions of dollars. If a physician were to prescribe this unapproved and untested combination off-label, and there are serious adverse events, including deaths, these doctors will risk: their license to practice medicine, their personal assets, and their business assets. This is the same thing that happened with Fen-Phen. Fen-Phen was also unapproved and untested, and several patients died, and several physicians were found liable for significant damages.
    14 Jun 2012, 11:18 PM Reply Like
  • krap_buster
    , contributor
    Comments (289) | Send Message
     
    Qnexa is a reformulation of existing generic drugs topiramate and phentermine available since 1960's we know for a fact they don't meet today's all time worst USA obesity epedemic crisis based on data.

     

    ARNA partnership with Eisai and Swiss manufacturer ready with 1 billion pills 1st year. To date VVUS has no partner and no manufacturing. There wil be no REMS for Lorcaserin. No marker and no FDA request. VVUS will have restrictive REMS for Qnexa. Women of child bearing years should consider avoiding Qnexa as there are known data from trial regarding risks for cleft palates.

     

    US government has demanded that FDA approve novel drugs and held Obesity Conference end of March this year. VVUS mgmt has now delayed both FDA and EMA process with last minute data submissions. Also VVUS CEO just yesterday sold another 50K shares on top of mgmt selling millions back in February something is not right there. ARNA mgmt on the other hand awarded 2.275 million shares in March only 10,800 have been sold to date & none by CEO this is very telling.

     

    Lorcaserin will be approved on time June 27th and ARNA/Eisai has launch ready to commence soon after.

     

    Lorcaserin is safe, well tolerated, and effective passing FDA efficacy standards in trials by meeting 2nd endpoint. Lorphen will definitely be prescribed by physicians immediately from day one adding phentermine to Lorcaserin, and Lorphen will become USA & worldwide blockbuster very soon.
    15 Jun 2012, 12:29 AM Reply Like
  • BrandonUK07
    , contributor
    Comments (121) | Send Message
     
    The biggest problem I have with Qnexa is that it is not novel. Physicians have already been prescribing the combo for some time now. I had one patient on the combo pay about $20 for the phentermine and $10 for the topiramate (insurance covers because they can not discern the use i.e. migraine prophylaxis, seizures, bipolar disorder etc.) making the monthly cost only $30. If I were a physician why would I prescribe Qnexa and have to deal with a REMS when a) I could write lorcaserin which is safer or b) if I'm really into Qnexa I can bypass REMS and save the patient money by writing phentermine + topirmate separately.

     

    I actually had a patient call me the other day for advice because she was complaining of tingling in her extremities and was thinking she was having a stroke. I referred to the ER, but also informed the patient that was common with topiramate. Later the patient called back to inform me it wasn't a stroke and was most likely the adverse reaction to topiramate. The patient had also been complaining of slow mental recall and forgetfulness. I'm an ARNA long, but I would rather start with lorcaserin even though it may not be as efficacious. If I'm a type 2 diabetic, I'm definitely starting with lorcaserin.

     

    Again, as far as the "lorphen" goes, it should be considered malpractice to prescribe this off-label and risk patient harm without any studies. I believe "lorphen" has promise, but it may be years before we find out what that promise is and it's safety. I believe the FDA is concerned about a Fen-phen part 2 even though lorcaserin doesn't show the cardio signals like fenfluramine did.
    15 Jun 2012, 12:54 AM Reply Like
  • JD Connell
    , contributor
    Comments (26) | Send Message
     
    Lorphen will cause countless valvulopathy problems and doctors will be sued up the ying yang. Unbelieveable you sit there spewing that Lorq/phen combo nonsense knowing the history of fen-phen.
    15 Jun 2012, 12:22 PM Reply Like
  • sts66
    , contributor
    Comments (3280) | Send Message
     
    Unbelievable that you claim to be an ARNA long but sit there spewing nonsense like "Lorphen will cause countless valvulopathy problems and doctors will be sued up the ying yang." and "I believe the FDA is concerned about a Fen-phen part 2".

     

    Man, the shorts are getting desperate....margin calls sure hurt, don't they?
    15 Jun 2012, 05:50 PM Reply Like
  • BrandonUK07
    , contributor
    Comments (121) | Send Message
     
    sts66, that is my opinion on "lorphen" for the moment. I'm a true ARNA long, but I think we're all jumping the gun thinking that the combo, without proper studies, is safe for patient use.

     

    I think only compelling obesity cases should warrant such use of that combo until the studies have been completed. As -synthesis- above stated in regards to Qnexa, "I would probably discuss Qnexa as an option along with a discussion of Lap band, gastric bypass, and sleeve gastrectomy risks and benefits," the "lorphen" in my opinion would fall into this discussion as well. Also from a malpractice standpoint, I would ask the patient to sign a waiver that stated something to the extent that this combo has not been studied and that adverse cardiovascular events up to, and including death could happen (just like with any surgical procedure) and that in my opinion the risk of untreatment outweighs the risk of treatment.
    18 Jun 2012, 12:01 PM Reply Like
  • sts66
    , contributor
    Comments (3280) | Send Message
     
    That waiver wouldn't be worth the paper it's printed on if the patient has an adverse event, just as no surgical risk paperwork holds up in court if the surgeon botches up, or the any of the other multitude of problems occur due to mistakes made during the procedure. Heck, even if everything is on the up and up and "sh*t happens", the docs still get sued and usually settle out of court.

     

    Risk Waiver in any circumstance of life = worthless paper
    18 Jun 2012, 06:26 PM Reply Like
  • drendo4u
    , contributor
    Comments (8) | Send Message
     
    Author’s reply » Why would Lorphen cause valvulopathy. Valvulopathy is caused by the fenfluramine part of fen-phen not phentermine. Lorcaserin affect the 5HT2c and not 2b so there is no valve issues. You should read up on that before criticizing.
    30 Jun 2012, 11:59 AM Reply Like
  • JD Connell
    , contributor
    Comments (26) | Send Message
     
    The biggest mistake of this article is how carelessly the writer suggest Lorcaserin can be prescribed with phentermine. Any person that has done an ounce of research on this combination would see that both are listed as anorexics and phentermine is currently contraindicated for use with other anorexics. The reason for this is the well know 30% risk of increased valvulophy found when fen-phen was being used. How a supposed doctor can publically pump a drug combination WITHOUT proper research is worrisome but then I see he's pumping his stock.

     

    I'm long both ARNA and VVUS
    14 Jun 2012, 11:47 PM Reply Like
  • drendo4u
    , contributor
    Comments (8) | Send Message
     
    Author’s reply » If you have done your research, then you would have known that fenfluramine affects the 5HT2B receptors causing valve issues and not phentermine. Even Dr. Hendricks, an obesity specialist, said that he and other doctors might try prescribing Belviq in combination with phentermine
    30 Jun 2012, 12:10 PM Reply Like
  • LooseChange
    , contributor
    Comments (71) | Send Message
     
    Hey, I'm only a ceramic engineer and I know didley about the medical ramifications posed here in this blog. But I'll tell you this; it scares the bejesus out of me that so many supposed experts can find so much by which to disagree, and even worse is the putrid odor implied by some of you that a legal Disclaimer of stock ownership is needed. I was hoping for open debate using just da facts, Ma'am. Yes, transparency. (Speaking of which, I own 2000 shares of VVUS that I bought at 4 PPS.)
    16 Jun 2012, 12:17 AM Reply Like
  • supaflix
    , contributor
    Comments (23) | Send Message
     
    Recently finished my 5th year of Radiology residency so I have a medical background. Although Radiologists don't prescribe much, we do have to do a clinical internship and I'm just out of training and thereby in touch with what is going on now.

     

    I wanted to agree with above posts that Physicians will always choose the safer drug if there are 2 drugs with similar efficacies. Our healthcare training is significantly impacted by the threat of malpractice lawsuits that threaten to ruin a physicians career. We are trained to be over-careful. Why shouldn't we be? 4 yrs of college, 4 yrs of medical school, 5 yrs of residency, 1 yr of fellowship, and 200K of debt to top it off? All of that down the drain because of 1 bad outcome while we're trying to help someone. Blame it on terrible malpractice laws. Why am i ranting about this? Bottom line: Locaserin is safer and will be first prescribed. If there is any hint of birth defects with a drug such as Qnexa, rest assured that will sit in Physicians minds. If they do prescribe Qnexa, they will verbalize and make certain to document their discussions with patients in charts and wherever they can to protect against liability. Making Qnexa more time consuming and riskier. Despite all this documentation? Yes, Physicians still get sued.

     

    All these precautions will make Qnexa more time consuming and riskier. 2 things Physicians really don't like...especially if there is a safer alternative that is close in efficacy.
    21 Jun 2012, 06:37 PM Reply Like
  • LooseChange
    , contributor
    Comments (71) | Send Message
     
    Hey Supaflex, as I type this with my right hand I'm holding in my left hand a cold can of beer. The can wears a Government Warning, "According to the Surgeon General, women should not drink alcoholic beverages DURING PREGNANCY (italics mine) because of the risk of birth defects." Mnnn, good beer! A first rate pilsner. Do you need more examples of serious warnings on commonplace substances? Cigarets? Still legal, but with a stern warning on the label.

     

    Have you as a person who has literally devoted the first third of his life to just LEARNING the medical profession EVER had the time to watch the afternoon television programs that advertise new medications (my wife says, Humira comes to mind) and their miraculous life improving qualities that then go on for the last half of the ad rapidly listing all the bad stuff that could happen?

     

    BTW are you (I'm being sacrastic here) aware that obesity is also a deadly disease? Couldn't you be held responsible for prescribing the far less effective Loracasirin when all the data were showing that Qnexa is by far the better script?
    22 Jun 2012, 11:58 PM Reply Like
  • supaflix
    , contributor
    Comments (23) | Send Message
     
    Loosechange,

     

    I totally agree with you about the obesity epidemic. Its out of control. We need to rein it in. I hope both of these drugs and more similar drugs get approved assuming their benefits truly outweigh their risks.

     

    The point of my post was to express it from the physicians standpoint and to give perspective on how a physician will approach these drugs. The first thing they tell us when we get into medical school? "First do no harm." That sounds obvious at first, but when you actually practice medicine you realize that you are under the constant threat of lawsuit...to the point that we have to be redundant and often wasteful in the safety precautions we take. You have the failure of malpractice reform to thank for that.

     

    Put yourself in those shoes and then consider this scenario:

     

    Drug A: Slightly safer, slightly less effective.
    Drug B: Slightly more dangerous, slightly more effective.

     

    I guarantee 9 out of 10 physicians will choose Drug A as initial therapy. Why?? Less risk, First do no harm, and last but definitely not least - Don't get sued!

     

    Lastly, it sounds like you are invested in Qnexa. If so, I would advise against associating it with cigarettes and alcohol as those 2 have caused innumerous health problems and cost our nation trillions of dollars. Qnexa is much safer than either of them.
    23 Jun 2012, 02:01 AM Reply Like
  • msapp
    , contributor
    Comments (363) | Send Message
     
    Haven taken Topiramate, I can loosely give you a patient's perspective. (Unless Qnexa's side effects are lessened by it's combination with Phentermine) Topiramate's side effects will cause some, possibly many patients to stop using it. I had to stop graduate school because it made me forgetful and unable to unable to concentrate. It causes me to be "foggy" and I've lost some of the mental sharpness I had. The dosage I'm taking is a higher dosage than will be in Qnexa but patients in the trial had similar complaints.

     

    I am losing weight. I didn't want to though and didn't need to. I've lost @ 10% of my weight. If I were on this for only weight loss, it would not be worth it to me to put up with the side effects. I would have stopped it.

     

    I am LONG ARNA. It has fewer side effects, is safer, but some may argue and trials show patients will not lose as much weight. So what. We don't need a pill that solves the overweight problem in a swallow. A diet drug needs to be ONE PART of the plan to lose weight along with exercise and proper nutrition. The combination is the winner. I feel doctors should push that combination, one diet drug and exercise and proper nutrition. That's the way to sustainable results.
    26 Jun 2012, 03:23 PM Reply Like
  • Crazysight
    , contributor
    Comments (60) | Send Message
     
    Not a doctor, have been an RN for several years, though I don't know that matters much when we are analyzing data in order to make future projections. The one thing I would like to point out though is that I keep seeing people mention essentially what you stated supaflix, that being
    "Drug A: Slightly safer, slightly less effective.
    Drug B: Slightly more dangerous, slightly more effective."

     

    Based on the clinical trials this is an inaccurate portrayal of the efficacy of these drugs. Drug B is actually far more effective based on those trials, while the positive results from Locaserin have been so slight they could even be chalked up as placebo effect. I do however agree with the malpractice perspective, I feel that Locaserin will be the first drug of choice prescribed by physicians. Qnexa has the greatest potential for actual results however, and it may come to pass that the patient's themselves end up requesting it after finding Locaserin to be ineffective, and therefore may stay on it longer and actually purchase more of it.
    7 Jul 2012, 11:29 PM Reply Like
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