The U.S. weight loss market is estimated at $61 billion, with the global weight management market expected to be $650 billion by 2015. Yet, despite this size, FDA approved weight loss products can’t catch a break. Let’s look at the latest blow to the industry and decide whether or not upside is present.
The importance of Consumer Reports
If you ponder the impact of Consumer Reports, just ask Tesla Motors Inc (NASDAQ:TSLA). The company’s Model S was given a 99 out of 100 – the first time in six years such an assessment was given – this helped push the stock from $56 to over $90 following its first quarter report.
In case you don’t you don’t see the relevance, you should keep in mind that shares of Tesla only rallied 14% on the announcement of its earnings, the next wave of gains came after the Consumer Report.
Consumer Reports is a non-profit organization that has more than eight million subscribers. Much of its ratings are compiled from data of its one million devoted readers that partake in surveys. Other ratings are given from teams of professionals with extensive knowledge on a specific topic or product. In addition, the organization is extremely powerful, and influential, with more than 600,000 activists who change legislation and the marketplace in favor of the consumer.
When an organization this powerful gives a negative review on a product, it is taken very seriously and will affect the success of that product. This is downright awful news for Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) and its recently launched weight-loss drug Belviq.
Consumer Reports says “exercise”
Consumer Reports is advising overweight individuals to “skip” Belviq due to “slim results” and “risks galore”! The organization’s medical advisers note that patients lose just 3-3.7% of their body weight over a year’s time. The cost for that 3-3.7% weight loss is “headache, dizziness, fatigue, nausea, dry mouth, and constipation.”
Thankfully, Consumer Reports does offer an alternative, or a recommendation, for those who are considering Belviq to lose weight, “eat less and exercise.” While this may sound silly, it is true.
Let’s say you weigh 300 lbs, and you intake enough food to maintain that weight. There are approximately 3,500 calories in a pound, meaning if you cut 500 calories from your diet, you will lose one pound per week. Theoretically, you could lose 30-50 pounds a year with this discipline depending on your level of motivation.
With the “cut 500 calorie, a day” diet, a 300lb person could lose 10-15% of their body weight over a year’s time. This is three-five times more than Belviq, without changing your lifestyle, and it saves the consumer money.