I just spent several hours going over the complete Credit Suisse analyst report done by Lee Kolowski on 30 September that tanked Arena stock. He used a Dicounted Cash Flow model that goes out to 2020 to come up with his conclusion that the stock is worth $4 here. if you closely peruse this report, one of the things that you discover is that in Exhibit 1 Belviq End-User Net-Sales Model Changes, it states "US only". I then went through each of his Exhibit 9 Annual Income Statement looking at Total Product Revenues and Collaborative Agreements/Milestone payments and computed and compared them with the Arena/Eisai agreement and found that Kalowski is indeed using only US data. He has not computed anything in for Korea, Taiwan, Europe or Rest of World! This is unbelievable that he is only using projected US sales! Everyone knows that the further out one goes on a DCF model, the less accurate it becomes yet he goes all the way out to 2020 only because he shows Arena cash flow dropping dramatically in that year! If he would have gone out to 2017 ( the first year that he shows Arena with positive cash flow) and discounted it back at 15% annually, he would have come up with ARNA being worth $5.95 right now - remember that this is based on US sales only! If Kolowski had included any projections for ROW, as he should have, a very conservative estimate would have raised Cash Flow Estimates at least 50% and his report would show the stock would be worth $8.92 here. As I have said before, I am not in favor of a DCF model for a developmental biotech as it gives absolutely no value to a company's pipeline, which is a huge part of the value of a biotech. (look at what ARNA was worth when lorc was only in phase 2). I also believe that a 15% discount for each year is much too heavy a discount in a period of near zero interest rates. Take Kalowski's report, add in ROW, and use 2017 as a terminal point and use a 10% discount per year, you see that Arena stock is worth $10.95 here!
There are 4 driving forces that begin to come together starting in this week's script numbers. 1) Direct to Consumer ads 2)Family Practitioner show (4,000 doctors) 3)ABC channel broadcasts 4)Doctor dinner conferences. None of these have been in the previous script numbers because the earliest one, the DTC ads in magazines, did not come out until Sept 19 (that is when my wife received her's in mail) and it takes a few days before anyone reads and discovers ads plus minimum of 1 week (in most cases 2 weeks or more) to get a doctor appointment. All other catalysts were at end of September and could not possibly have any effect until last week, which means they start to show in this weeks number. Once again because of doctor appointment delay, this week's number will not be affected as greatly as the following weeks but we will still see a good increase this week. I made projections for each event based on impact and timeline, and have determined we will see a minimum of 4550 scripts or increase of 12.5% minimum this Friday. We will see a minimum of 5618 scripts the following Friday for an increase of 23.5% (minimum) and will see minimum of 7078 scripts the third Friday for a minimum increase of 26% the third Friday (Oct 25). I have been very conservative with this projection - we could see a great deal more. Hold your shares because we are just on the cusp of exponential growth. The short hedge funds know this also, and that is why they had to get the analysts out ahead of it to beat down Arena so they could cover and get out before the stock takes off. Hold on, we're just about there!
"We have signed an agreement with Roche for the European Marketing Rights to Belviq. Roche has paid us $25 Million upon signing, and will give us an additional payment of $50 million upon European Approval. Roche will handle rhe resubmission with the EMA and all future European requirements. We expect an approval within the next year and because of this and other pending collaborative agreements, strongly believe there will be no need for any additional financings in 2014 or 2015." My COMMENTS: Deals like this are often put together just before earnings, particularly when the stock price is depressed, because the other party knows they can get a little better terms since a company like Arena is edgar to announce something very positive and boost their stock. (That's how Eisai got 31.5% Arena split vs. the 33% that Arena wanted.) Roche is the Pfizer of Europe ($47.35 Billion sales vs Pfizer $50.01 Billion) and is based where Arena has its manufacturing plant so they are most likely partner. This would send the stock into the mid 6's the next day.
From the 10Q : "The Eisai BELVIQ Agreement includes payments by Eisai if annual minimum sales requirements in the additional territories are not met during the first ten years after initial commercial sale in Mexico, Canada or Brazil. In addition, we are eligible to receive up to an aggregate of $1.19 billion in one-time purchase price adjustment payments and other payments based on Eisai’s annual net product sales of BELVIQ in all of the territories under our agreement on an aggregate basis, with the first and last amounts payable with annual net product sales of $250.0 million and $2.5 billion, respectively. Of these payments, Eisai will pay us a total of $330.0 million for annual net product sales of up to $1.0 billion. We are also eligible to receive up to an additional $185.0 million in one-time purchase price adjustment payments based on Eisai’s annual net product sales of BELVIQ in the non-US territories under our agreement, with the first and last amounts payable upon first achievement of annual net sales of $100.0 million and $1.0 billion in such territories, respectively. We are also eligible to receive additional milestone payments totaling $53.5 million based on achievement of regulatory filings and approvals "
Yhey have been talking all year. Announcement could come tomorrow: A Fly On The Wall_ Roche And Arena Pharmaceuticals (ARNA) Conference Call_Partnership In EU With EMA Belviq Approval Topic Projects Biotech News Stock biotechnewsstockreview.blogspotdotcom/a-fly-on-walleisai-roche-and-arena.
They got $2 million from CY Biotech in late July. They get $1 million from Siegfried contract each quarter. They also book about $1 million from amortization of previous Eisai payments each quarter, plus a little over 100K from other amortizations. They will beat revenue estimates and earnings estimates.
None of the items you mentioned could have any effect yet. Magazines came to subscribers on Sept 19. Most people take a few days to a week to look at them; they then call a doctor it takes minimum 1 week for appointment so there is no way ads could have any effect yet - same wth ABC (3 stories not 2) and with FP conference- they were at end of September. All of these things won't start to drive any prescriptions until last week at earliest, which means they will start to be in this week's number release. I can't believe that people don't understand that this is why the analysts came out against Arena when they did - they had to get out in front of these numbers because the hedge funds are nervous and need to cover before the perscriptions jump. As I said, 1 week is a minimum to get appointment. Most doctors will take 2 weeks or longer so the real jump in prescribtions is really over the next 30 days as these catalysts take effect. Also that ABC feature is going to play in 18 markets. (some idiot said it didn't play in Miami but I watched it and you can find it on google). These are huge catalysts and you're going to see a big jump.
Yes, Belviq is perfect for Roche because they are also going to see Xenical taken off market and need Belviq to replace it.
3 CEO's and the CFO quit over at VVUS. It is impossible for an analyst to know more about any company than the CEO and CFO know. They quit and rejected it - they didn't want anything to do with VVUS, even though they were being well paid - yet the analyst upgraded it and said it was worth 90% more than it was trading for! Would you believe anything else this analyst says or does about any other company? You really don't need to know anything more.
They will make clear tomorrow that they have no debt. The $73 million that Yahoo and other financial sites show as debt in incorrect. Those are lease obligation payments that run out to 2027 and ARNA pays around $7 million a year for this lease in their expenses. These lease obligations are treated like long term debt only because Arena did a sale/leaseback years ago. There is no debt that comes due. See notes to financial statements in the 10Q.
The amounts that Yahoo finance and others show as debt are not debt. They are staggered lease obligations that run all the way out to 2027. Arena currently pays a little over $7 million per year towards these and they increase by 2.5% per year. You need to look at Arena Balance sheet and footnotes to see there is no debt! They will not have to do any financing next year - CS analyst is a blatant liar who is pushing the price down today to window dress the quarter on the last day for their short hedge fund clients. Here is the important footnote to Balance Sheet long term liabilities: "We occupy four US properties under sale and leaseback agreements that allow us the option to repurchase these properties at various dates between 2017 and 2027 and, in some cases, include renewal options. The terms of these leases stipulate annual increases in monthly rental payments of 2.0% to 2.5%. We accounted for our sale and leaseback transactions using the required financing method because our options to repurchase these properties in the future are considered continued involvement. Under the financing method, the book value of the properties and related accumulated depreciation remain on our balance sheet and no sale is recognized. Instead, the sales price of the properties is recorded as a financing obligation, and a portion of each lease payment is recorded as interest expense. We recorded interest expense of $7.2 million, $7.3 million and $7.4 million in the years ended December 31, 2012, 2011 and 2010, respectively, related to these leases. We expect interest expense related to our facilities to total $64.1 million from December 31, 2012, through the terms of the leases. As of December 31, 2012, the total financing obligation for these facilities was $74.5 million. The aggregate residual value of the facilities at the end of the lease terms is $10.0 million. "
I also owned Amzn then and remember how the analysts attacked it. I also owned Apple at $1 a share when the analysts said it could not survive because the competition was too great.
Today's number is very good considering that Magazines didn't come in Mail until Sept 18 (my wife got hers on Sept 19) and it takes 2 weeks minimum to get doctor appointment. the FP convention wasn't until weekend of Sept 27, 28 and ABC shows didn't air until Sept 26- 27 None of these are in last week's numbers yet! Remember that ABC owners have 18 cities that this clip will air in. Numbers should start expanding next report and really jump over the next 30 days as all of above kicks in.
They need Belviq: articles.mercoladotcom/sites/articles/archive/2012/12/26/weight-loss-drug-orlistat.aspx Many, many groups are calling for Xenical (Alli) to be pulled. The FDA is on the verge of pulling it. Roche needs Belviq.
You are a low-life creep. Stealing someone's name out of the newspaper who has suffered a terrible injury and acting like you are their concerned parent is about as low as a person can go. Any reputable pharmacist would know that Qsymia had a REMS and caused birth defects, and that Belviq was the much safer drug so you have libeled Walgreens as well. I am sending a copy of your posting to Walgreens and the SEC. I really hope they take legal action against you.
I think this helps explain why things have been slow to this point but will greatly pick up in the very near future as Doctor education has now really kicked in :"There are lots of hurdles in prescribing Belviq, and some of them involve physician education. I was at a dinner several nights ago and the doctor sitting next to me said that he recalled the phen-fen problems and was worried about heart valve damage from Belviq. He did not know that 20,000 echocardiograms were done during the Bloom, Blossom, and Bloom DM studies. He did not know that the rate of valvulopathy in the longest study, the two year Bloom study, showed a rate of valvulopathy of 2.7 % on placebo and 2.6% on Belviq. He did not know that an article in Circulation from spring 2013 by Neil Weissman that looked at the Belviq studies concluded that there was no difference in the rate of valvulopathy in placebo compared to lorcaserin. He did not know that receptor studies showed much greater specificity of lorcaserin for the 5ht2c receptor over the 2b and 2a receptors. All of this is a matter of physician education, which does take time. The article in seeking alpha today mentioned that Eisai will be expanding their sales force. This should help to get the word out to physicians about the safety and efficacy of Belviq.
Steven Vig md internal medicine tucson arizona
Detroit is coming soon. 18 markets will be covered with both the starter clip and the follow up clip (this one has only run in Phoenix so far at end of Sept). These are much more powerful than advertising. turnto23dotcom/lifestyle/health/patients-on-new-fda-approved-diet-drug-belviq-losing-weight-fast-10082013
There is no such thing as a "market" here - just some uneducated, stupid, or confused people who sell. The stock price only represents the last person who sold. That's why stocks trading at OTCC or on the Pinks often jump 600-700% in a day. Tou should go to OTCC or Pink websites and look at greatest movers every day. I've been trading in Pinks and OTCC for many, many years and have seen unbelieveble moves up tat you will never see on an exchange. How many stocks on the Nasdaq or NYSE have you seen gain 700% in a day? You saw that list of Pink sheet stocks I posted that moved hundreds of percents on just that one day. It will happen here. Anyone selling is nuts.
Ha, Ha! You made it so narrow that you thought nothing would qualify, but there are tons of companies. There are very few foreign companies on OTCBB. Here are two domestic that come to mind that were totally broke and sold assets - most people don't even realize that they are OTCBB stocks - FNMA and FMCC - both went up 10 fold after being on OTCBB. Here's a bankrupt one, sold assets, that doubled - XIDEQ. Here is that foreign one that meets all your requirements: PTQMF. It was totally broke and sold off almost all assets and, after going on OTCBB, it went from 5 cents to $3.35!!!! You are a negative Nellie who doesn't understand the stock market. The price of a security has nothing to do with it's value. Price only reflects the thinking & fears of the last person who sold. Ultimately the value of a company's assets and earnings come out when people sober up. That's why I will take your money.