Is the Wait Over? – Arena Pharmaceuticals, Inc. (ARNA), VIVUS, Inc. (VVUS), Orexigen Therapeutics, Inc. (OREX)

VIVUS, Inc. (NASDAQ:VVUS) has been asked by the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) to perform an additional pre-approval cardiovascular outcomes trial for Qsvia (Qsymia). Although both drugs have a different mechanism and safety profile, with Qsymia more risky, the lack of approval does set a bad precedent for Belviq. The analysts have also said that even if Belviq is approved in Europe the reimbursement rates will be pretty low, which will impact the valuations of Arena.

Bottom Line

The company has failed to meet Street’s earnings expectations or provide any solid information on the launch of Belviq. The real worry for investors should be the increasing pessimism of analysts on the approval of Belviq in Europe. The launch has been delayed but will happen sooner than later, and any news regarding this launch will push up the stock price of Arena. Despite this temporary bad news, I still believe Arena is a strong buy. In my opinion the obesity market is big enough for more than one player. Qsymia, Contrave and Belviq can all become blockbuster drugs and make a lot of money for the investors of their respective companies.

The article Is the Wait Over? originally appeared on Fool.com and is written by Mohsin Saeed.

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