This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Arena Pharma's Weight-Loss Pill Has Few Fans in Japan

Stocks in this article: ARNA VVUS OREX

SAN DIEGO ( TheStreet) -- Japanese stock analysts are not hot for Arena Pharmaceuticals' (ARNA) newly approved weight-loss pill Belviq.

Eisai, the Japanese drug maker, is in charge of selling Belviq in the U.S. under terms of its partnership agreement with Arena. This is why the Japanese sell-side community is weighing in on Belviq's commercial prospects. Like their U.S. counterparts, Japanese analysts are skeptical that Belviq will become the blockbuster weight-loss pill envisioned by Arena and its shareholders.

Here's what J.P. Morgan's Masayuki Onozuka told clients soon after Belviq was approved:

"Commercial success hinges on stronger marketing: We expect only a limited profit contribution from lorcaserin Belviq , as (1) early-stage marketing will require caution while the drug’s safety is being confirmed; (2) Eisai has just 250 US MRs marketing representatives for primary-care drugs; and (3) we think the drug’s exceptionally mild effectiveness -- weight loss of less than 5% even after three months of use -- could prompt many patients to stop taking it. We forecast a sales contribution of $100 million in 2014 (year two) and $200 million in 2016. With Eisai’s PPI Aciphex set to go off-patent in the US in 2013, the company faces an environment unsuited to an aggressive sales push for primary-care drugs, and we will be interested in seeing what kind of marketing strategy it comes up with."

Morgan Stanley MUFG analyst Mayo Mita wasn't any more effusive in her assessment of Belviq:

"For the treatment of obesity, Belviq competes with Vivus' (VVUS) Qnexa and Orexigen (OREX)/ Takeda's Contrave. Of these three drugs, Qnexa has the highest efficacy but relatively high incidence of side effects. Belviq has the lowest efficacy, while Contrave achieves a balance between efficacy and side effects in our view… While not yet incorporated in our earnings models, assuming peak sales of $200-500mn million , we believe the impact to Eisai’s profits will be limited given that it will need to procure the product and incur costs for marketing/PMS studies."

Credit Suisse's Fumiyoshi Sakal:

"The approval comes as little surprise after an FDA advisory council recommended it by an 18:4 vote (one abstention) on 10 May and appears to be already reflected in Eisai’s share price, which is at a YTD high. While we are impressed with the approval -- the first in 13 years for a new obesity drug in the US -- we also expect it to be only a modest positive for the shares of Eisai. We also see little possibility of lorcaserin quickly developing into a blockbuster… Arena apparently regards Eisai as an optimal partner in selling lorcaserin, but it looks like Eisai will face substantial milestone payments and other costs.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs