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 Expands Marketing Of Obesity Drug To Help Shrink Waistlines

Chris Lau, Kapitall: Arena and a partner will expand marketing efforts for a weight loss drug, but is there more room to grow?

Shares in Arena Pharmaceuticals (ARNA) soared after the company extended its agreement with its partner Eisai for the company's weight loss drug Belviq. Bearishness had continued to build in its shares with short float of around 26%. The stock recently hit a new low at $4.05. Should investors expect the 17% rally on November 8 to hold?

Losses narrow

Arena reported a loss of $0.08 per share, which beat consensus by $0.04 per share. Revenue was $3.6 million. In its quarterly report, Arena said it would double its sales force to 400 representatives by this December.

[Read more on Healthcare from Kapitall: Biotech Stocks Climb and Fall on Catalysts in 2013]

This will widen the reach to physicians in the US by 65,000. Advertising was also launched last quarter directly to the consumer. And marketing partner Eisai included a 15-day free trial voucher for Belviq.

  • 31.5% of product sales, or $1.7M, was recognized in Q3.
  • R&D expenses rose to a healthy $14.59 million, up from $11.6 million last year.
  • Cash also rose to $180.7 million, up from $156.09 million last year.

Expanded agreement

In return for $60 million upfront and an additional maximum $176.6 million in milestone payments, plus up to $1.56 billion in adjustment payments to Arena, Eisai will get worldwide commercialization rights. The rights would exclude South Korea, Taiwan, Australia, Israel, and New Zealand.

Competitor struggles

Vivus (VVUS), whose Qsymia obesity drug competes with Belviq, reported a weak quarter. The company lost $0.48 per share on revenue of $27.4 million. Qsymia sales totaled $6.4 million in the quarter. In response to the weak quarter, Vivus will cut its workforce by 20 employees (17%) to reduce expenses. The termination costs will be recognized next quarter and will be included in the up to $8 million costs.

Click on the interactive chart to see data over time. 

Analysis 

Arena continues to look to the long term. The company is increasing its sales force steadily, and taking its time to win acceptance from major players: physicians, consumers, and insurance companies. If successful, Belviq could be the top choice for obesity treatment in the US.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
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 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

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