MEMP already announced that the Q1 distribution will be maintained at 55 cents.
I was at their presentation and break-out session at the IPAA Conference on Tuesday and was very impressed by what I heard. At the break-out session, they stated that the current distribution rate can be maintained as far as the eye can see, even in the current oil-price environment.
I initiated a position in MEMP after hearing them at last year's IPAA Conference, and I increased my position after hearing them on Tuesday.
Yes, of course, I realize that Belviq has more total scripts and more new scripts and that both B and C are at record levels. However, those points miss two critical facts: 1) given C's considerably greater TRx and NRx growth rates, it will not be that much longer until C's total script and new script levels surpass those of B; and, 2) more importantly, we have to generate exponentially higher levels of script growth in order to produce the needed revenue to cover---at least in large part if not in whole--- the, roughly, $ 150 million in expenses Arena is projecting for this year. And, this dramatic increase in scripts and script growth has to start very soon since any other sources of revenue, whether from the pipeline or South Korea, are, as yet, unknown and, regarding the pipeline, probably well into the future.
Unfortunately, though, repeating a pattern we have seen all too frequently, C's TRx increased at more than triple the rate of B and its NRx increased at a 40% greater rate than B. And, what makes this longer-term pattern more surprising and perplexing is that OREX/Takeda has not done DTC advertising and has a drug carrying a Black Box label while Eisai has done extensive DTC advertising ( however checkered and
imperfect ) and is marketing a drug with a sterling, unimpeachable safety/tolerability profile.