Okay, Thomas Wei is basically showing a couple of things here.
First, Wei is a bit naive about the dynamics of the market. Physicians want a stand-alone treatment that can be given over the longer term and that is very safe. Not every patient is to the extreme. Most overweight people can improve their health drastically by losing the type of weight loss seen in Arena's trials.
Second, he states that he thinks lorcaserin will get approval...that is without a doubt a huge positive. Makes you wonder why he didn't put the target higher. I think it's fairly obvious that he is giving himself plenty of room to up the target price once the NDA is accepted and a partnership is announced.
Third, his comments on combo therapy are a bit silly really. Combo treatments are notorious for running into trouble with the FDA. I am sure this will be the case for obesity agents. Wei needs to consider the case of Pozen before getting too exciting about combo therapies. Of course lorcaserin will be used in combo in some cases, but going for that label makes no sense. Arena is keeping it simple...simple is better when the FDA is worried about side effects way more than efficacy. We have enough efficacy, but we don't have nasty side effects...that's a great situation. If physicians want to prescribe it in combo once it's approved then it's on them. Initially, we need to be focused on getting to market as a single agent.
Even if the label specifically stated that lorcaserin "has not been studied as a combination therapy and shouldn't be prescribed as such" it would still generate huge revenue in that so many people would use it as a stand-alone. And it would take only a little while before physicians started to use it in combo...not just when phentermine but also Welbutrin and Topamax even if they're not approved. Oh...sorry...my mistake...I guess I just let the cat out of the bag. You don't need approval of topamax or Welbutrin in obesity to prescribe them...you can already get them in similar doses as generics.
My opinion is that lorcaserin is the only agent with proper data to support approval. The FDA can see exactly what it is and is not doing. That is what the FDA wants to see.
Wei has very likely never worked in industry. I didn't highlight at all why Arena's composition of matter patents are so important and attractive. That makes me question his motives. It should make you question them also since they're so important. If he overlooked this, it should make you question his level of expertise. Is he an analyst with an MD and MBA or does he actually have some relevant industry experience?
I agree completely. The point that to me stands out here, and for some time, is that we have what appears to be the only safe, stand alone product that works. You can argue about whether it matches the performance of others, but I would be far more nervous about them even getting approval, and thus subject to the potential of rejection and a complete crash in price. There is a big market for this. IMO And the risk is lower here, with approval more assured. It goes up with application, with approval and with sales.IMO Buy on weakness.imo
I have enough experience in the industry to probably run laps around most analysts.
All I'm saying is that these guys/gals go through a little schooling and come out with amazingly simple opinions because they have not an ounce of expertise in industry. It's just a fact.
What he knows is science. He doesn't know this business at all and when the market starts to value Arena he'll suddenly change his tune and dance along. That report was pathetic and failed to highlight any of the real value.