Arena Pharmaceuticals (NASDAQ:ARNA) and Medivation (NASDAQ:MDVN) don't report earnings until later this month, but investors got a sneak peek at sales of their drugs when their respective marketing partners spilled the beans in their earnings reports.
Not only should investors in those biotechs be paying attention to the partners' announcements, but so should investors in Johnson & Johnson (NYSE:JNJ) and VIVUS (NASDAQ:VVUS), which have drugs that compete directly with Medivation's Xtandi and Arena Pharmaceuticals' Belviq, respectively.
Astellas reported about $124 million in sales of Medivation's prostate cancer drug, Xtandi, in the quarter that ended in September -- that's Astellas' fiscal second quarter, which is everyone else's normal third quarter. That's up from $86 million in the previous quarter, an impressive 44% quarter-over-quarter growth rate.
A lot of the growth came from Europe where Xtandi was only granted marketing approval in June, but sales on the continent are still only about a tenth of the sales of the U.S., so there's plenty of room to run in Europe.
Even in the U.S., Xtandi has lots of potential. In the same quarter, Johnson & Johnson sold $204 million worth of its competing prostate cancer drug Zytiga, which has a bigger addressable market. Astellas and Medivation can market Xtandi for use after chemotherapy, while Johnson & Johnson has a pre-chemo indication for Zytiga.
Fortunately, Astellas and Medivation already have data in hand to show that Xtandi works in those early patients. It'll take a little while for the FDA to approve the new indication, but the clinical trial results should be enough to convince many doctors to prescribe it off label.
Arena Pharmaceuticals news from its partner Eisai wasn't as hot. Sales of their obesity drug, Belviq, amounted to just $4.8 million in the third quarter, up from $4.2 million in the previous quarter.
While a 14% quarter-over-quarter growth rate isn't too shabby, you should note the relative sales level. It's hard to pay the bills on manufacturing revenue of less than $5 million. The previous quarter was also the quarter when the drug launched, so you would have expected sales to be substantially higher in its first full quarter on the market.
The low sales seem to be stemming from discounts that Eisai has to give to get patients onto the drug. VIVUS has had to do the same thing; in the second quarter, 44% of prescriptions for its competing obesity drug, Qsymia, were offered for free or at a discount. It's a short-term sacrifice that will hopefully turn into a long-term reward.
Despite the low sales, Eisai still appears to be dedicated to getting Belviq to blockbuster status, recently announcing that it plans to double the sales force marketing Belviq.
Fool contributor Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.