Arena Pharmaceuticals, Inc. (ARNA): 1 Biotech You Might Want to Explore Right Now!

After more than a year, Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)’  weight-loss drug Belviq has finally launched. Let’s look at recent history to determine how successful the drug might be, in both the short and long terms.

A Tough Start for the First to Market

VIVUS, Inc. (NASDAQ:VVUS)’ Qsymia was first to market, having already been sold for half of the last year. However, sales have been less than encouraging, as total company revenue totaled just over $6 million during the last two quarters. As a result, Vivus’ stock has declined 43% over the last 12 months.

Vivus has had a rough start with Qsymia. The drug combines two currently approved drugs: Phentermine and topiramate. Much of Vivus’ early struggles has been due to battles with insurance companies, seeing as how its “ingredients” can be prescribed and obtained individually for a fraction of the price.

Moreover, Vivus cannot aggressively market Qsymia nor can it be sold in retail pharmacies. Qsymia comes with a risk for women, causing significant birth defects if taken while pregnant. As a result, women taking Qsymia must also take birth control, and the prescriptions must be obtained from “certified mail-order pharmacies”. While this makes sense in regards to protecting women, this can be an inconvenience to potential patients, and doctors, and has negatively impacted initial sales.

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)’s Belviq is likely to see a better start, since Belviq will be marketed heavily and can be obtained at any retail pharmacy.

What Happens With Belviq?

In the U.S., with obesity being an epidemic, and with us having a tendency to try new weight loss remedies, I think we could see strong demand in the initial months following launch. To better explain why, let’s take a look back at the 2007 debut of big-name weight-loss product Alli.

Alli, developed by GlaxoSmithKline plc (ADR) (NYSE:GSK), was expected to be a blockbuster as the first FDA-approved OTC weight-loss drug. GlaxoSmithKline spent a fortune on this drug in lobbying, development, and then marketing to the general public, trying to ensure its success.

During its first three days on the market, sales hit $12 million, putting it on pace to earn more than a billion in the first year. Alli’s first year on the market actually saw sales of $247.2 million, which still wasn’t bad. Following its first decent year, consumers began to realize that Alli didn’t produce a great deal of weight loss – but did come with rather unpleasant side effects.