Not What the Obesity Doctor Ordered

Sales of Arena Pharmaceuticals' (NASDAQ: ARNA  ) Belviq through the first six months of the launch have been rather pathetic, coming in at just $17 million. Arena Pharmaceuticals' marketing partner Eisai spilled the beans Monday morning during its quarterly earnings conference call.

A blockbuster would be able to do that level of sales in about six days. It took Eisai six months.

If you're looking for some kind of good news, sales are actually growing.

Drug

Q2 2013

Q3 2013

Q4 2013

Belviq

$4.1

$5.4

$7.5

Source: Arena disclosures. Sales in millions.

The second quarter was mostly stocking since the drug launched in June, so the only real comparison is the 39% quarter-over-quarter increase from the third to fourth quarter. Most biotechs would love that kind of growth, but working off such a small base, it's essentially meaningless.

If Belviq's sales continue at the same growth rate, it'll reach blockbuster levels -- $250 million per quarter -- in the third quarter of 2016. Arena really needs Belviq to see sales triple or quadruple in the coming quarters to get investors excited.

But how?
I don't think Arena or Eisai have done anything wrong launching Belviq. VIVUS (NASDAQ: VVUS  ) hasn't really done any better with its competing obesity drug Qsymia. The biotech hasn't released fourth-quarter sales figures yet, but Qsymia sales were just $6.4 million in the third quarter.

Unfortunately, the companies launched into a market where doctors are understandably a little skeptical of treating obesity with drugs. Having two drugs pulled from the market over safety concerns will do that.

I think the solution is to go to the patients and get them to ask their doctor about it. A doctor who's a little skeptical of a drug's risk-benefit profile might be more willing to prescribe the drug if a patient asks for it even if the doctor wouldn't initiate the prescription. Eisai already has print advertisements. The next logical step is television spots.

The other major stumbling block has been paying for the drug. Insurers are slowly adding Belviq and Qsymia to their coverage lists, but it's often at tier 3, which comes with high copays. Both Eisai and VIVUS have had to give free and discounted drugs to get and keep patients on their drugs.

From an insurer's perspective, the problem is that weight loss has long-term rather than short-term health benefits. Since insurers don't know if their member is going to be with them next year, it's hard to justify encouraging patients to use the drugs to lose weight.

Employers that self insure, on the other hand, have more motivation for their employees to lose weight. In addition to the health benefits, feeling good can make people more productive; the reason that employers offer memberships to gyms to their employees.

Last month, VIVUS announced that it was partnering with Aetna (NYSE: AET  ) to include Belviq as part of a weight loss program offered to Aetna's self-insured plans. Arena and Eisai would be well advised to follow suit with other insurers.

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Read/Post Comments (6) | Recommend This Article (0)

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 February 03, 2014, at 7:55 PM, RBRMD wrote:

    Is this slow growth different than other novel drug?

    Is this a one drug company?

    Is it safe?

    Does it work very well for a select group of patients?

    Is the potential benefits make it worth a try in any overweight patients

  • Report this Comment On February 03, 2014, at 8:12 PM, RBRMD wrote:

    Sorry, posted too soon. Continue on.

    Does Belviq have other potential uses?

    (e.g. type2dm, smoking cessation, etc.)

    Does the holidays impact last quarter?

    Will the drug be used in other countries?

    What are the many other products being

    developed at Arena?

    Does Arena have the Potential for

    Multiple Blockbusters?

    Did the sales force just double?

    Have commercial been prepared?

    Is it heavily shorted?

    Is 5HT2C receptor and CN2 receptor important?

    Will it likely be combined with other drugs like

    Metformin and Phenteramine?

    That is all I have time for just now.

    These issues might be important if you would like to help investors evaluate the stock? Just Wonder.

    Our is six months of initial sales data tell the whole story. I have to defer to an expert such as you. I am really not sure. Thanks for your help.

  • Report this Comment On February 04, 2014, at 2:13 AM, biogemfinder wrote:

    Brian O'Smelly is back to pounce on the wounded stock..what a brave man he is....especially since he was missing in action wjhen the stock was risign from 4..05 to close to 8.

    Keep showing your ignorance, but you couldn't care less since your purpose here is to help your short masters nothing more nothing less. So we understand.

    But as far as substance in your blog..there really isn;t anything it just stinks!!

  • Report this Comment On February 04, 2014, at 4:23 AM, marp11 wrote:

    2016?? i can wait,., load up even more.

  • Report this Comment On February 04, 2014, at 4:29 AM, marp11 wrote:

    2016 long term arna investors can wait,

    can your masters stay short 2 years longer OSMELLI??

  • Report this Comment On February 04, 2014, at 4:38 AM, bmc007 wrote:

    biogemfinder - exactly. It was peaceful for a short while there as the share price was rising and not a word from the usual bashers. Then the sp drops and they're back like fungus in a damp cellar. Predictable as the weather. Time will put them all in their place.

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