Wow, a thumb down for reporting what CS reported, you people are precious. That's why I put the pom pom queens along with the bashers on ignore, they have no value in discussing the stock. That wasn't my opinion but that of CS.
For what its worth, Lee, Adumb, + Cramer are all short the stock + they all missed the call. CS has no financing plans with ARNA but does with OREX, hence the outperform on OREX and underperform here. The analyst opinion is at 1.9 for OREX + 2.7 for ARNA, basically a buy there and a hold here. OREX is having its day but it will fall once they announce the secondary. The bright spot if its true, is Takeda employing 2000 reps to sell Contrave vs the 400 here.
He did update as of 11/8.
We have updated our model following Q3. ARNA reported revenues of
$3.6M, in-line with our $3.1M. Following Q3, we are maintaining our Belviq
net sales forecasts, while updating our expense forecasts and timing of the
royalty/milestone payments from the expanded Eisai agreement. While this
deal provides a commercial path in international markets (and cash next
quarter), it is unlikely to accelerate regulatory timelines. We also think this
deal makes an acquisition less likely. We have already been modeling
EU/ROW revenues and assumed a partnership. The royalty rate is modestly
below our forecasts, but overall does not change our DCF valuation.
■ Q3 Belviq net sales ($5.4M) was above Rx-implied demand. Few
additional details were provided on the call and actual Q3 demand is not
being disclosed. In Q3, net sales appear bolstered by Eisai’s calculated ASP.
It’s not clear exactly how Eisai is calculating the ASP, but we cannot
mathematically reconcile the reported ASP of $132 (a 34% gtn adjustment)
with 60% of Rx being 30-tablet free vouchers ($0), as stated. Further,
management said wholesaler inventory is “running higher” than the normal
2-4 weeks on-hand, but without precise demand, it’s difficult to know exactly
how much excess inventory wholesalers have. If Rx data are accurate, the
inventory build could be substantial (see Exhibit 1) - this will eventually need
to be worked off of future demand. We leave our Q4 and future Belviq net
sales unchanged; sell-side consensus may come down post-Q3.
■ Valuation: We continue to value ARNA on US and international Belviq cash
flows. Our target price remains $4.
CS has an outperform on OREX and a target of 11 or a market cap of 1.1B. They have a neutral on VVUS, target reduced to 10 + a cap of 1B. Then they have ARNA at underperform, target of 4 + a cap of 860MM. Those are 1 year out targets. To keep things in perspective + to know where that particular analyst sits. Both VVUS + OREX presented at their conference ARNA did not, I wonder why.
VVUS, no pipe, large cash burn, secondary coming, large debt and a drug that is in against Cialis + Viagra + of course Q.
OREX, no approval yet but looking at their presentation at CS which provided a pom pom speech + no specifics, they expect this to out sell all drugs ever made. Their other drug, also weight loss, as they have nothing else in the pipe. They said approval imminent on C with sales starting 3rd Q 14, + EU approval by year end 14. They do have a strong marketing partner in Takeda. They have 95MM cash so expect a secondary unless Takeda kicks in cash soon.
ARNA, 240MM cash, low burn rate, 1 drug out, other indications coming, more upfront payments coming, increasing sales force + DTC and a strong pipe of other drugs. Strong short interest causing drag on the stock.
Do the math + tell me where you want to invest?
Is just that speculation + not germane to increasing profits + sales ahead. As far as Eisai, they would be within their rights to accumulate shares at these levels IF they were interested in a buyout + they would be able to get shares on the cheap, or for that matter, any other interested BP. They wouldn't even have to state any accumulation under 5% of the float. That isn't happening. The stock was grossly over sold for everyone but CS + thestreet AF + JC. Shorts are still in the game but some serious damage was done with the new Eisai deal + the new influx of cash that all but eliminates a secondary. The short thesis starts to evaporate as sales pick up in the coming months with the new initiatives taking hold, added territories, more up front payments, + new updates on their pipe. They will have to head for the exits by no later than mid year 2014.
I hope it increased substantially. WHEN not if, sales start to ramp up, the short squeeze will be more pronounced.
Sorry the question is what were IMS sales data from inception vs what the company reported? That gives a better indication as to how to follow scripts data and apply it to reality. It also gives a better clue on how revenues/profits are trending, factoring in the free samples that will continue as they roll out to GP's.
Bottom line the company is in great shape going forward especially considering increased indications for B + the pipe which every ANALyst is ignoring. This will be a big story in 2014.
On what is being reported by IMS + symphony and what the company issued on the call? That is the real deal and what should be tracked moving forward, hockey stick or not.
Can you at least read before posting:
Arena has also rescheduled its conference call and webcast to tomorrow, November 8, 2013, at 8:30 a.m
This should have moved big time on the news. They beat estimates by .04 + signed added agreements with another 60MM up front that all but puts to bed any secondary's. Add the pipe, belphen, other indications for B + the stock is barely up! Something is not right. I did put in an order AH at 4.10 + it hasn't filled but the way its trading it might. Curious as to why they postponed the conf call to tomorrow AM.
I know and agree with both your + Sharon's points, however, they are linked as I said like it or not. That is like saying Cialis + Viagra aren't linked. The 2 play in the same ball park + today's actions prove it. Unfortunately, tomorrow we will see another leg down AH as we will not hit the numbers. IMO Eisai slow played the product launch + are now playing catch up, hence the doubling of the sales force + the push into DTC. Fri will be a great entry point as the worst will be behind us as the 2 catalysts take over intermediate term and into 2014. I would expect we will see the lows of the year on Fri + hopefully the absolute bottom. If you play options, the 4 puts might be a good play as they're cheap insurance. We will dip below 4 + may hit 3.50 before its all said + done.
I like to see opinions that aren't on the pom pom side + usually see it from Hedge of the posts I follow + not the bashers as they aren't worth reading as they present zero arguments.
BUT I respectfully disagree that VVUS has no reasons for discussion. For the most part yes but when it comes to sales + balance sheets it is germane. Both companies are new to the obesity market + came on stream ~ the same time with Q hitting the selves 1st. Since the phen phen debacle there have been no approved weight loss drugs so like it or not, these 2 + possibly contrave will be forever linked in how they perform, both in efficacy and sales. The financial positions of both are important in how they market + sell the drugs as well as how they control costs + what they have left to support their pipes, in the case of VVUS that's kind of lacking.
Yes Hedge to be fair they had the non recurring charge + I'm surprised at how much that proxy fight cost, Manhattan should pay VVUS for that assault as they are now in charge + have done nothing to help. They did get a non recurring payment of 21MM, bottom line, they lost 48MM. With cash of 358MM - 48MM that leaves them with 310MM - 206MM debt or a net cash position of 104MM, not exactly robust with a secondary on the way shortly, unless Manhattan decides to pony up cash. That doesn't leave a lot on the table to market + sell, hence the RIF but that will also cost them in the 4th Q up to another 8MM. Yes there is room for 2 or even 3 players BUT they have to be solvent. ARNA has the better pipe period + adding phen to B will be the best in efficacy + safety, including contrave. The report on Thur probably will be light + ARNA will get hit again but with the added sales force + DTC 2014 is shaping up well for ARNA.
There is heavy selling, the stock dropped 5% yesterday + is on pace to drop that much again, 10% in 2 days on no news. There was a traded put at 4.50, 1200 contracts for 11/1, which implies that someone is placing a bet on a not so great report from Eisai on Fri concerning B sales. Concur with some tutes not able to hold a stock under 5, usually it has to trade below 5 for 30 days which this will. Premature for end of year tax selling but this is a huge candidate for that being down so much YTD which could be another move down into the 3's by year end. All bets are off that IF sales ramp. Cap is now 20MM below VVUS.
The catalyst is sales and they have to ramp up before we will see a jump in PPS. It will take at least a month for DTC to have impact + the sales force increase won't be a major factor until next year as they come up to speed + start penetration at the GP level. This is a 2014 play not 2013. Any positive news on the pipe will also help, not like the last miscue from IR.
How's your cleft lip investment doing? We know 100% that that happens + no conjecture or guessing involved. They also have massive debt, high SG&A expenses, no pipe, no partner, + a huge secondary coming, along with 3 or 4 more CEO's.
What is your idea of bashing?!?! Sorry, I didn't write the article for the investing firm I just posted it here. INVESTORS read everything about the companies they are invested in + not just the articles that make the company look good. That's why most here are areniacs, because they don't look at anything but the roses. I'm long + have been for some time, however, I do read everything about the company + that's what I base my investment decision on, everything.
I respectfully disagree but it will come out in print today. Discounting belphen, pipe, new DTC + doubling the sales force.
Needham cautious on Arena, reiterates Hold
"Based on the ratio of NRx/TRx, refill rates appear to be low," Needham's Alan Carr says, referring to Arena's (ARNA) Belviq.
The shares rallied sharply Tuesday, after marketing partner Eisai (ESALF.PK) said it will double its sales force for the weight-loss drug.
Nevertheless, Carr says "Belviq patient awareness [is] low." The analyst also calls single-agent efficacy "modest."
Hold rating reiterated.
ARNA +1.3% premarket.
Not going to happen and like always, they are slowly moving it back down after the initial run to 4.75. I'll be surprised if they let it stay up .10 on the day. At least the company confirmed what was conjecture, it is increasing the sales force, a great sign, but it won't play out till early next year.
We know they are expanding the sales force but what we don't know is for what drugs. I thought it was for another class of drugs that were seeing the increase in sales people + not for B. I could be wrong + usually am.
Selling is grossly overdone + I don't get the power of CS on this stock as they were the driver with their reiteration of underperform + target of 4, along with Cowan at market perform + VVUS + OREX at outperform! Give me a break. Maybe they knew about the new partner for VVUS. Remember that target is for 1 year out so they expect ARNA to be trading at 4 a year from now. I was really surprised at the number of puts traded a week ago on the 4, over 2500 dec13 + 7K jan 14! Someone is placing a big bet that we go lower. I've said many times, shorting a stock at this price is ridiculous as the most you can gain is 4 assuming 0, and the most you can lose is infinity. Another problem here is staying below 5. Many funds cannot own a stock below that level which will create more pressure selling. Next year at this time we'll all be celebrating, just not this xmas.
I agree BUT Q has its own sales force that is not at the same level as Eisai, they have REM's, we don't, they don't have a DTC yet, + their sales were up triple ours. These weren't great numbers. Long term this stock will be the ultimate winner but we won't see it for a year. Being down now 10 of 11 days and over 28% isn't what I would call stellar performance. Mgt sitting on their hands doesn't help but the new ads in People look very promising + hopefully we will see TV ads soon. That will be the big catalyst moving forward but it will take some time to gain traction. Advancement of the pipe will help along with what the latest is with BelPhen, which the company has failed to share with its shareholders. That will be the drug of choice + B alone will be used mainly for other indications, T2B, smoking + drinking cessation.