What to Expect From Arena Pharmaceuticals, Inc. (ARNA)’s Launch of Belviq

4. While VIVUS, Inc. (NASDAQ:VVUS)’s distribution is constrained by FDA’s REMS requirement, Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has the marketing muscle of an experienced Big Pharma, Eisai, behind it. Eisai has experience launching blockbuster drugs in the same space in the past, has some 207 sales reps dedicated to Belviq, and a team of 50 focusing on insurance reimbursements. One week within launch Belviq is available in 20,000 pharmacies nationwide and is already being advertised in various publications in a variety of fields of medicine, e.g., in Contemporary OB/Gyn.

5. Belviq is also a diabetes drug. The Bloom DM study produced a 27 point drop in the fasting glucose level, along with a 0.9 point drop in the hemoglobin A1C level; improvements which are comparable to many of the diabetes pills that are in use today.

Doctors and Patients speak out

Two of the doctors who will be prescribing Belviq state their reasons for doing so in these two videos: a physician from Harvard Conference on Medical Weight-loss, and a NewYork-Presbyterian/Weill Cornell physician.

The reason I believe in Belviq’s success is the mechanism of action. The big enemy of weight gain is appetite; when it’s there a person eats and it’s a kind of thing that can’t be fought because fighting it causes cognitive dissonance, psychological friction, which leads to loss of energy which means the fight is lost. Belviq tames appetite at a very fundamental level: stimulating the brain cells that are associated with satiety. So the person finds himself or herself going through the day with much less appetite for eating, smoking, craving.

Now that we’ve outlined why Belviq’s launch should be better than Qsymia’s, let us look at the sales expectations.

Revenue expectations

Analysts are all over the map with their sales projections. One of the more bullish firms, Jefferies, in a recent research note to clients outlines three scenarios, and the most realistic one was chosen to determine the target price of $12 for ARNA. In this “target scenario” Jefferies expects Eisai to generate revenues of $32.7 million in CY2013.

Is Jefferies’ target scenario achievable? If we take a conservative stance and discard June due to the free 15-day offer Eisai is providing on www.belviq.com. Eisai has six months to reach this target. Divided by ~207 sales reps, each rep has to generate $158,000 worth of Belviq sales in the next six months, which is around $26,000 per month which is around 195 bottles of Belviq at the discounted price of around $135 (retail price is around $210 and Eisai is providing a $75 coupon per month for a year).

$135 a month even for a person without insurance is not that much. Many people spend at least that $4.5 per day on coffee, snacks, cigarettes, beer, etc. Belviq is cheaper than many weight-loss programs out there which for the most part have been ineffective in combating the obesity epidemic.

I mention cigarettes because there’s scientific evidence that Belviq may treat nicotine addiction, and Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has indicated they will conduct a smoking secession trial.