Spencer, it's time you are called out again. I have repeatedly criticized your disingenuous articles about ARNA in the past. It's easy because you always seem to make the same mistakes over and over again, missing the bigger picture.
You seem obsessed about Belviq's weekly prescription trajectories, gross and net revenues, and imaginary milestones that you have misinterpreted on your own. Not once have you ever integrated in your calculations the $136 Million milestone payments Arena has received from Eisai. Like it or not, Spencer, this is REAL INCOME for ARNA. Why do you ignore that? Have you ever thought about a non-GAAP earnings report amortizing in this income over the next 5 years?
If this real (in the bank) NET ARNA income is amortized over 5 years, that's an additional $2.27 Million a month, or $27 Million a year! Add your very tenuous and questionably derived $10 Million earnings a year (which is ridiculously low), and you get $37 M a year income. With 220M shares outstanding, this company would have a P/E of 5.94. Given a conservative average market weight multiple, this stock should be a legitimate share price TODAY of at least $18-22 a share, and that ignores it's game changing potential income impact of food service company income, the tobacco industry, medical device makers, and last but not least, the big pharmaceutical companies.
We aren't going into the Titanic scenario for Qysymia- VVUS from multiple pathways, or the pie in the sky glimmer of hope for FDA approval (maybe so, maybe not) for Contrave-OREX in the future as competition.
You never obsess over their futures.
If you are going to be a healthcare journalist, we suggest you take the bigger picture and relax. The real money is not going to be made shorting this stock.
Sentiment: Strong Buy
$37m in sales vs. 220m shares does not equate to 5.94 P/E. I don't think you understand how P/E works because you took total shares and divided them by sales. That's not correct on two fronts because a) P/E is the share price divided by earnings not shares and sales and b) when you divide the OS by sales you don't really get anything that's helpful. If you want to look at this as price versus sales...a different metric than P/E...then you take the market cap of ~1.4 billion by 37m. You get a valuation that's 38 times sales which is astronomical, even for a biotech.
WOW. I thought I had seen it all on this board, and then I come across this gem. What an ASStounding piece of "financial modelling".
Learn basic math before attempting equity valuation. Moron, lets assume that your $37mn in earnings figure is correct (which it isn't..), with 220mn shares how on earth are you getting a P/E of 5.94? Its the other way around tinkerbell.
And why is nobody here correcting this idiot?
Wait, is this a fake/troll post? Is this a fake post pretending to be written by an Arena long, satirizing the stupidity of Arena longs? Has to be, because nobody is this dumb. OK, OK, you got me..
FLUSHED YOU OUT DIDN'T I? LOL!!! We knew you would respond. Now we know which alias you are using this week! By the way.....your articles are intellectually threadbare, and you are fooling no one!
Sentiment: Strong Buy