The Good News, Bad News for Belviq: …Now the Good News

Belviq, Arena Pharmaceuticals' (NASDAQ: ARNA) lead obesity drug, continues to rack up mediocre sales numbers as sales performance continues to lag expectations. Fans of Belviq and Arena still see the drug as a potential blockbuster but questions remain as to how Belviq can still meet lofty pre-launch predictions.

In an earlier article, I noted that Belviq will likely need more time to fit into accepted standards of care and many physicians will simply need more exposure to Belviq before they feel comfortable exposing obesity patients to a new drug. In the meantime, physicians will still rely overwhelmingly on tried-and-true approaches including diet and exercise.

That being said, there is ample good news for Belviq into the mid-to-long term. Arena and marketing partner Eisai (NASDAQOTH: ESALY) remain confident in Belviq's potential and have recently moved to up marketing efforts significantly. Furthermore, physicians will likely warm up over time to a new medication option in an area that is short on decent drugs.

A much needed pep talk
Recent actions on the part of Arena and Eisai seem to indicate that there is a renewed effort to overcome some of the barriers Belviq has faced since June. In particular, Eisai recently announced intentions to double Belviq's sales force by December.

Given that many physicians still need convincing before they switch patients to a new and unfamiliar medication, this can only be seen as a good thing. Additionally, Belviq's label still carries warnings against rare but potentially fatal heart valve and neurological side effects -- increased outreach to physicians would likely go a long way to lessen fears surrounding its safety. 

As part of the bigger picture, Arena and Eisai also recently initiated an agreement giving Arena and Belviq channels into markets around the world. It appears Belviq will get more than a few chances to make a splash within the obesity market at a time when obesity is becoming a growing problem in more countries

As an added bonus, agreements between Arena and Eisai include big potential milestone payments based on sales, development, and regulatory progress. However, the maximum cumulative payout of $1.56 billion may require time and borderline transformational results from Belviq to obtain. 

A rose among thorns
While Arena and Eisai undertake renewed efforts to better market Belviq, the current landscape of lackluster "old guard" options may have already done investors a few favors. Outside of the newest generation of weight loss medications, including Belviq and VIVUS Therapeutics' (NASDAQ: VVUS) Qsymia, the cast of existing weight loss medications is pretty shaky.

While relatively effective, familiar weight loss drugs like orlistat, sold as Xenical by Roche (NASDAQOTH: RHHBY) and over-the-counter as Alli by GlaxoSmithKline (NYSE: GSK), and generically available phentermine both suffer from their own major issues.

Phentermine, an appetite suppressant that acts on the brain, has a number of well-documented side effects that makes it dangerous for many patients. This is especially true for patients with cardiovascular problems including stroke, heart rhythm trouble, and high blood pressure (all problems common among the obese) as phentermine is well known as a medication that causes significant cardiovascular problems on its own.

Additionally, phentermine is regulated as a controlled substance -- a distinction that comes tied with all sorts of storage, monitoring, and prescription strings.

Similarly, orlistat, a medication that prevents absorption of fat, can cause notoriously severe diarrhea and stomach upset in many of its patients. 

For Belviq, which has a relatively cleaner safety profile even when compared to fellow newcomer Qsymia, the field looks favorable as more patients are turned on to its potential as a less hasslesome drug option.

The waiting game
I still think it's too early to say if investors should reconsider the sky-high expectations of the Belviq pre-launch estimations, but I do believe that Belviq needs more time to gain traction than Arena investors are willing to admit.

Like most new drug products, new prescriptions are everything for Belviq which means getting physicians to write those new prescriptions for their patients. Even milestone payments, no matter how generous on, ultimately rely on getting Belviq closer to patients. While this is harder said than done, especially in a finicky area like obesity treatment, I believe that Arena at least has many of the right pieces in the right places.

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Read/Post Comments (8) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 27, 2013, at 10:36 AM, marp11 wrote:

    seriously get a different job

    yer sooo boring

  • Report this Comment On November 27, 2013, at 10:38 AM, marp11 wrote:

    milestones not important??

    what company you like that has

    1.56 BILLION COMING???

    PLUS 1/3 OF ALL SALES [NOT PROFITS]

    AND FREE MARKETING /PROMOTION

    AND HUGE PIPELINE

    AND 268 MILLION IN CASH

    AND ZERO DEBT

    AND ROW PARTNERSHIPS?????

  • Report this Comment On November 27, 2013, at 11:37 AM, gazoo99 wrote:

    Wow..... Talk about "soft bashing" hit pieces!

    The Author needs to do "WAY MORE" due diligence prior to attempting to write an article.

    Just slamming the stock..... with a hidden agenda.

    Shorts & Wall Street are starting to show how desprite they are to tank ARNA.

    There's going to be a lot of "suits" looking for tall buildings to leap from real soon!

  • Report this Comment On November 27, 2013, at 1:09 PM, bamobrien wrote:

    I never said milestones are not important- I said they would require time for Belviq to deliver to reach.

    $1.56 billion is not a guarantee so no, there is no guarantee it "is coming, but it is obviously nice to have as a target and I still feel is a very good thing for Arena.

    I don't care what Arena's cash-on-hand, pipeline, and debt structure are if the product doesn't catch on. Stocks are forward looking instruments- I only care about future performance.

    Hidden agenda chatter is ridiculous and rather indicative of how many retail traders think Arena is a road to a quick buck. Crying "soft bashing" is a great way to say characterize yourself as too blunt to appreciate the nuance of a drug market.

    I'm cautiously optimistic and overall favorable for Arena- I think you should be too.

  • Report this Comment On November 27, 2013, at 6:16 PM, gazoo99 wrote:

    Wow again......

    Someone's got their panties in a bunch.

    No quick roads to a buck, I've had thousands of shares for longer than you may want to think.

    Average buy at $1.86.

    So..... that blows your theory all to hell.

    Next time do as I said, more due diligence please!

    Useless articles are, just that USELESS.

  • Report this Comment On November 28, 2013, at 11:48 AM, bamobrien wrote:

    ...and I have millions of shares of aapl at an average of -$20.30.

    You can't pump a stock with empty comments, it helps to actually have some analysis before calling the kettle black.

  • Report this Comment On November 28, 2013, at 7:40 PM, gazoo99 wrote:

    BLACK KETTLE....................

    I'm calling it!

    I know what's my pocket..... but, you sir......

    A completely different story!

    I can "COMPLETELY" back mine up......

    Thinking you're a puddle waiting to run down the drain.

  • Report this Comment On November 28, 2013, at 10:43 PM, bamobrien wrote:

    I can't begin to tell you how funny I find it that you use quotation marks for emphasis especially in the context of your last comment.

    You're doing my work for me. Keep it up.

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