Wild imaginings with at least some basis in reality
In the 1990's there were about 40 million obese Americans, maybe a little more. The rate of obesity was 26-27% and the population of the entire country was about 50 million fewer than today.
A weight loss drug hit the scene in the early 90's and it was on the market until 1997 when it was pulled due to heart valve damage among a small number of those that used it. That was Phen/Fen. The 'phen' part of the two drug compound was NOT the offending chemical. It was the 'fen' that did the damage.
At its peak, Phen/Fen was being prescribed to the tune of 18 MILLION scripts in its best year. I am going to ASSUME that these were all 30 day scripts. That means, if they were 30 days and not 60 or 90, that about 1.5 million people were taking Phen/Fen. That would equate to a market share of 3.75% of the adult obese population was taking phen/fen. Now, if some of these scripts were for 60 days, then the percent could be even higher, but let's stick with 3.75%.
What IF (huge IF, to be frank) Belviq or BelPhen (when it becomes available) was to garner 3.75% of TODAY'S obese market? To be frank, that would take years, but Belviq can run for 11 years or so on its current patent. Let's do the math.
3.75% of 65 million obese is 2,437,500 people. If they were all paying 175 dollars for Belviq that would be 426,562,500 in sales per.... month. On a yearly basis that would be 5.12 billion. That would also be bringing in about 1.8 billion to Arena in revenue. That would be about... 8.25/share in revenue. Let's let Arena live high on the hog with an operating budget of a quarter billion per year, leaving earnings of 7.00/share.
Let's use PE of 12. That's 84 bucks a share.
I will admit it. This is a PUMP. But, it is a pump that is based upon something that has ALREADY HAPPENED in the past. Phen/Fen GOT 3.75% of the obese population in the mid 90's.
Could it happen again? Heck, at only 1% market share, that's 20-24/share right there.
So its best year was the year before it was pulled off the market. Which means scripts and sales would have only gone higher had serious health problems not become an issue.
I don't think assuming that 2.4 million people will go on Belviq and continue on it until they hit their weight loss goals is not a pump is is realistic... But as you pointed out it is going to take some time to convince the doctors it is safe and effective. That will take even more people being on it and that is happening right now. During the 2 major phase 3 studies we had almost 8,000 on the drug for 1 and 2 years and no real side effects. Do you think a year from now when more then 50,000 people have been on Belviq successfully and have lost weight and gotten healthy that won't be enough to convince the doctors at that point?
If we were going to see any issues they would start to show up when that number folks have been on the drug. .0001 of the total would still give us 5.8 cases.... So we just need a little time under our belts and a lot of success stories to point to...
Luk: In the absence of unforseen safety issues which sometimes appear after an expanding database of user post approval over time thats higher than the clinical program numbers, yep we see expontential growth.
Thats why the cleanliness of our safety profile up front is so important and its important to keep it that way. Its always been more about safety than efficacy. Some decent efficacy is required, but in weight loss if you don;t have benign safety, your in trouble.
ARNA has the safety profile and moderate efficacy! Thats the right combination!.