The Hidden Way to Invest in Obesity

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The Motley Fool's health-care show Market Checkup focuses this week on obesity, one of America's largest health-care concerns. Recently classified as a disease, obesity leads to serious health problems, including diabetes, heart disease, and stroke. Currently 35% of adults in the U.S. are classified as obese, but more troubling, one out of three children is as well. All told, obesity adds $190 billion in medical costs to the system, but efforts to tackle this growing problem are increasing.

In this video, health-care analysts David Williamson and Max Macaluso discuss the third and often forgotten obesity-drug maker, Orexigen. This small-cap is stuck running an additional phase 3 trial for Contrave while its two competitors have made it to market. But given its prior positive FDA advisory committee vote and its small market cap, Orexigen may be the best speculative play of all obesity stocks. Watch and find out why.

Rising health-care costs continue to be a hotly debated topic, and even legendary investor Warren Buffett called this trend "the tapeworm that's eating at American competitiveness." To learn more about what's happening to the health-care system -- and how to potentially profit from this trend -- click here for free, immediate access.

Follow David on Twitter: @MotleyDavid.

Read/Post Comments (7) | Recommend This Article (1)

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  • Report this Comment On June 30, 2013, at 9:06 AM, AreaRich wrote:

    The reason it's hidden is because it is not approved by the FDA yet.

    Lets see, should I invest in a company that cannot now, or may never generate sales. Orexigen. Or

    should I invest in company that has no marketing partner, no experience in marketing, no hope of finding a marketing partner because 1) It has to taken on non-dilutive (Ha) debt ( so what is the collateral? The patents?) and its launch is unsuccessful. 2) its drug is a combination of cheaper generics that have safety issues thus the REMs 3) Management is under attack by a disgruntled major investor (why is that?) Vivus.

    Now, lets look at the markets hit piece target Arena. It is currently trading @7.70 per share. It has no debt. It has a ten year tax holiday is switzerland where it manufactures the drug in a factory that it owns, and which can easily be expanded for additional supply demands. (2

    It has 1.3 billion in net operational losses which can be used for U.S. tax write-offs ( these are cost to bring its one and only fda approved drug to market) 3) it owns patents which will not expire until 2023 on its "New" FDA approved drug, which is a "New" technology. 4) It has a pipeline of new drug candidates it is starting to bring to market thru trials and has the funds to do so.5) It has a marketing partner in a large, experienced Pharmaceutical company in Eisai. Which has provided to date approximately 89 million in upfront incentive payments. Of the first billion in sales, due to this incentive program, Arena will receive approximately 750 million of that amount.6) The medical community, the only authority that really counts, has so far embraced the drug and the AACE has recommended Belviqs be used as a treatment for obesity. That is quite a recommendation when a medical association has endorsed your product. The AMA has voted to recommended obesity be treated as a disease, Congress issued a written request to the HHS, and FDA that they act in a manner to address the national obesity problem before Belviq, or Qysmia were approved. Of the two Belviq has comparable efficacy, and a much greater safety profile. So, there seems to be a strong possibility of a shift in policy regarding the treatment of obesity which will bring more insurance funding. Which company will be left standing?

    So, what is the problem with Arena Pharmaceuticals (ARNA) share price? The only thing is that many bet erroneously against it and shorted it to the tune of 59 million shares. Lazy research has them in a bind that they think can be solved by having misleading hit piece articles written about Arena. Soon, those 59 million short positions will be a big advantage when they must cover as script numbers show progressive improvements. 79% increase over week one. What will week two bring. As Eisai reps visit more of their clients growth should be better week, over week. We shall see, Arena Long investors are a patient bunch, hence the very large trapped short positions.

  • Report this Comment On June 30, 2013, at 9:14 AM, AreaRich wrote:


    Should be.....What will week "three" bring.

  • Report this Comment On July 01, 2013, at 2:48 AM, Foreeverlong wrote:

    Belviq's sales will steadily improve. Wait until television advertisements begin. Most prospective consumers don't know about Belviq yet. Weight reduction is one benefit of the drug, but physicians will quickly see the benefit for Type II diabetes. Very exciting future for Belviq.

  • Report this Comment On July 01, 2013, at 8:33 AM, Paulson545 wrote:

    What about SafeStitch Medical ( SFES ) ? Getting in early can bring huge profits. Billionaire investor Dr Frost has been picking up shares in SFES and he has a great track record.

  • Report this Comment On July 02, 2013, at 12:31 PM, belviquser wrote:

    I went to my doctor for my annual physical 6-13 and asked about Belviq. He had never heard of it, but called Walmart. They said they could get it so he wrote a script for 30 days with two more refills. I picked it up on Sunday the 16th of June. When they told me I owed $212 for 30 days, I about fell over, but decided to go ahead and try it. My wife and I quite smoking almost a year ago in August, so this cost was about what we used to spend on cigs per month. I weighed 278 on the 16th but had already dropped from 287, which took months. This morning I weighed 271, but have only been on Belviq for 16 days. Now this is not long enough to tell, but it has really curbed my appetite. Will report results on August 1st.

  • Report this Comment On July 04, 2013, at 1:46 AM, healthbusiness wrote:

    Yeah, obesity still is seen as one major health problems today...Well, let's just be cautious in taking weight-reduction drugs. Let's all march smartly to <a href="">wellness and wellness marketing</a href>.

  • Report this Comment On July 04, 2013, at 1:50 AM, healthbusiness wrote:

    Yeah, obesity still is seen as one major health problems today...Well, let's just be cautious in taking weight-reduction drugs. Let's all march smartly to <a href="">wellness and wellness marketing</a>.

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Related Tickers

9/28/2016 4:00 PM
ARNA $1.77 Down -0.04 -2.21%
Arena Pharmaceutic… CAPS Rating: ***
OREX $3.29 Up +0.05 +1.54%
Orexigen Therapeut… CAPS Rating: **
VVUS $1.17 Down -0.03 -2.50%
VIVUS CAPS Rating: **