VIVUS, Inc. (VVUS), Arena Pharmaceuticals, Inc. (ARNA) & Some Key Catalysts Approaching

Page 1 of 2

The obesity stocks are perhaps some of the most discussed and followed stocks in the entire biotechnology sector. The two drugs to receive FDA approval so far are Qsymia from VIVUS, Inc. (NASDAQ:VVUS) and Belviq from Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) Pharmaceuticals . The third competitor, Orexigen Therapeutics, Inc. (NASDAQ:OREX) is still trying to get the FDA to sign off on their obesity treatment Contrave. The drug is undergoing more tests to determine its cardiovascular effects on a large test group. Once Contrave does get FDA approval, the rally in Orexigen Therapeutics, Inc. (NASDAQ:OREX) can be huge, however investors will also be a little cautious considering the post-approval decline of VIVUS, Inc. (NASDAQ:VVUS) and Arena.

VIVUS, Inc. (NASDAQ:VVUS)

The Decline

Shares of Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) and VIVUS, Inc. (NASDAQ:VVUS) have depreciated significantly since the FDA granted approval to the two treatments. There are three primary reasons behind this post-approval price depreciation. The biggest reason behind any post-approval decline is the profit taking of long term investors. VIVUS, Inc. (NASDAQ:VVUS) has also suffered due to the poor market performance of Qsymia, which has shown slim sales despite huge expectations from the market. The company recently reduced the price of the drug and also introduced a free trial system that could help increase consumer interest. The retention rates of consumers after the trial period have been pretty impressive.

The third reason has been the unexpectedly poor feedback from European regulatory bodies. Investors of both drugs were expecting their products to receive European approval, but any such acceptance is still largely elusive. Despite these issues, investors still believe in these products, and both companies have market capitalizations in excess of $1 billion.

Belviq Launch

Investors have been waiting for a Belviq launch for quite a while now, but DEA scheduling is still elusive. Otherwise Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) is all set to launch Belviq, and the company is partnering up with Esai, which gives this partner a significant share of any future Arena revenues. It is almost 100 days since the DEA application, and the market expects that a decision will be made by the month’s end. On the other hand the European Medical Association (EMA) might give a decision on Belviq during the week’s meeting. If these two approvals come through we will see a mammoth rally in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)’s stock price.

Pipeline Strength

The key to all biopharmaceutical companies is the strength of their respective pipelines. Even if there are approved candidates available in the market, having a strong pipeline reduces the reliance on a single product and thus reduces the risk for investors. If we compare VIVUS, Inc. (NASDAQ:VVUS) and Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), the latter has the better pipeline.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!