Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Do not short the stock itself, buy puts.
These bear raids are scary! Just hang in there1
Wall street at half staff, a lot of heavy hitters away for a long weekend. Still we have beaten back a couple of bear raids today.
Monday will even better out come for us. Today is nice!
Baby short squeeze going on. Wait till the real PRs hit.
The PR we needed is on ALPHA NOW!
If most of the stock is owned by retailers, who are the shorties?
It can't be retailers,because we don't have the where with all to conduct bear raids.So, they have to be the pro's .
We can't buy anymore,because we are all tapped out to force a runup in price.SO, its us little guys against them. We have a couple of aces in our hands. What we need now is a couple of PRs,more exposure and we are off to the races.
I just wanted to be #10000.
Good luck to all of us.
That bear raid until 9.45 should be outlawed, as should other gimmicks that favor mm's over the public.
This says it all
On June 27th, Arena (ARNA) investors were finally rewarded for their conviction on lorcaserin's approval chances with a thumbs-up from the FDA. After a short-lived bump in the stock price, Arena shares have retreated back to pre-approval levels making the benefit for holding over the binary event non-existent. So is now the time to sell or is now the time to add to a position? Arena must now wait for the final DEA scheduling of lorcaserin, to be marketed as Belviq by Eisai (ESALF.PK), before they can launch.
In 2010, I wrote an article called "What the Analysts Won't Tell You about Arena" and I believe most of what I wrote still holds true almost 2 years later. Obviously my timing was bad not knowing the content of 2010's briefing documents and not understanding that the FDA wasn't ready at the time to approve a new weight loss drug. So now with Belviq approval in hand, why are analysts still so wrong about Arena?
Arena shares are held primarily by retail investors according to the latest numbers from NASDAQ. Historically, institutions will come into a biotech stock post-approval to eventually result in a holding percentage equal to at least the 72% that retail currently holds. With that in mind, we should see a shift in ownership over the remaining of 2013 from retail to institutions. The big boys do not want to chase the stock and are far more sophisticated in accumulation strategies than retail investors are.
The only thing retail investors can do is just hold their shares and watch or capitulate because of a flat stock price and sell their shares to the institutions. Market Makers have resorted to issuing weekly option series as a tool to control the run-up in stock price. Unfortunately, the only thing that can bypass this orderly distribution of shares from retail to institutions without running up the stock price is news.
There are a number of stock-moving news events which could take place in the coming months. Vivus' (VVUS) Qnexa is up for approval on July 17th and if they receive a highly restrictive REMS, CVOT or an outright CRL, it would be a big boost to Arena. Arena has estimated that it will take 4-6 months for the DEA to render their final scheduling designation for controlled distribution of Belviq. The DEA review has been underway perhaps for a month or more reading into the FDA's approval letter to Arena. Given that, Arena could see an earlier DEA go-ahead than many expect, perhaps as early as September. This would lead to an early launch in the fall. Finally, there is the 120-day letter from the EMA that is widely expected to be received around July 25th, which will give investors the first insight into how approvable Belviq is for the European market. On the heels of this letter, I expect an EU or perhaps EU and Rest of the World partnership for Belviq - if not an outright acquisition of Arena by Big Pharma.
However, the only event that will truly show what the value of Arena and Belviq is (outside of an acquisition) are actual sales. Every single analyst is completely wrong when it comes to Belviq sales projections, and they have been wrong for years. Those same analysts have been wrong about a lack of REMS as reason for a likely lorcaserin approval delay. The fact is, there is nothing to compare Belviq to in order to base sales projections. You have to look at the size of the market coupled with the profile of the drug to determine market penetration, script growth and overall profitability of the franchise.
I wrote in February 2012, with the stock trading well under $2, why lorcaserin will be a blockbuster drug, and I still hold by this analysis. A drug with excellent safety, great tolerability and modest effectiveness is the perfect trifecta profile that doctors love to prescribe. There is really no reason why doctors won't liberally prescribe Belviq to their patients to at least give it a try. The label encourages 12 weeks of use and to consider discontinuing if the patient hasn't lost at least 5% of their body weight. At least 50% who take Belviq for 12 weeks will meet that threshold. Many of those who don't will also stay on it, because of likely improvements in their HbA1c and fasting glucose measurements along with blood pressure and cholesterol.
Eisai's sales force of 600 will focus on endocrinologists initially and follow via a contract sales force to primary care physicians. This is important because today, only a small percentage of endocrinologists prescribe any weight loss drug. According to the CDC, there are more than 20M Type II diabetics and over 70M pre-diabetics who could greatly benefit from Belviq, and endocrinologists will likely welcome new tools to help their patients lose weight while improving HbA1c by an average of 0.9%. It is also important to understand that Belviq's improvement on glucose control is likely not just because of weight loss. There are a number of studies available that show effecting a sub-receptor of 5-HT2c has a distinct method of action that can improve glucose sensitivity. You can bet this will be studied further in post-marketing trials by Arena and Eisai.
Eisai will not be limited to marketing Belviq to the masses about its benefits. I expect national advertisements stating average weight loss of 5.8% and responder average weight loss of 11% coupled with average HbA1c of 0.9% and the main side effect being a mild headache. There will be millions who will ask their doctors about Belviq once they see these ads. The demand for a safe and effective weight loss drug is where the analysts have it completely wrong with Belviq, just like they were about it ever being approved and requiring a REMS. Even without a sales force initially directly covering the primary care market, there will be thousands who will readily try Belviq for their patients. I think this can be underscored by a recent interview by weight loss specialist Louis Aronne, M.D. with New York Presbyterian on CBS News.
Analysts covering Arena expect very modest sales for Belviq, reaching sales north of $1B a few years after launch. This is part of the reason why the share price hasn't soared post-approval. After all, a market cap of $1.8B for Arena if you don't expect Belviq to sell more than a couple of hundred million in a few years might be right. However, they are very wrong, and this will become clear just a few weeks after launch. Once Belviq is available for distribution, weekly script data will be available from 3rd party services to show the performance of launch and market acceptance with week-over-week script growth. Given the lowball estimates for the drug, analysts forecast there will be no more than a few hundred thousand patients a year on the drug. So what happens to the stock price if there are a few hundred thousand who try Belviq in the first quarter after launch?
I forecast 250K scripts in the first full quarter of launch and for Belviq to generate over $1B in revenue in the first 6 months from launch, $2-3B in 2013 and to reach $10B in annual sales by 2015. Yes, these are audacious numbers unless you are open to looking at the size of the market without consideration of performance of previous weight loss drugs. There is no bigger market in all of pharma, with over 100M prospective patients in the US alone. There has never been a safe option for physicians to try. There is tremendous pent-up demand for options from both prescribers and patients.
In 1996, there were estimated to be 18M scripts written for the FenPhen weight loss combination, even without people marketing it, just by word of mouth. Belviq is a safe replacement option for the "Fen" part of this highly potent combination, and I fully expect there will be a BelPhen craze ushered in by Belviq -- thank you to social media. The difference is Belviq is safe and can be taken for maintenance long-term along with excellent benefits for diabetics and pre-diabetics. For these reasons, I expect several million patients to be on Belviq in year one, and when that happens, there is nothing that the analysts and institutions can do to depress the share price.
Investors who buy now and hold will be richly rewarded, in my opinion - either through stock appreciation based on actual sales or acquisition by a top 3 Big Pharma. That is why I continue to hold Arena as a long-term growth stock, not a speculative biotech.
Disclosure: I am long ARNA.
This article was sent to 5,594 people who get email alerts on ARNA.
Get email alerts on ARNA »This article was sent to 153,228 people who get the Long & Short Ideas newsletter. Get the Long & Short Ideas newsletter »
Please help improve Seeking Alpha:
How useful was this article?Please help improve Seeking Alpha:
Did you find this article useful?Yes No Sending feedback...Thank you! Your feedback will help us better serve you and other readers.This article is tagged with: Long & Short Ideas, Long Ideas, Healthcare, Biotechnology, United States
More articles by KLLJ Investments »
Is Arena Still A Speculative Stock? Fri, Jun 1
Preview Of Arena's Upcoming Advisory Committee Mon, May 7
Arena Pharmaceuticals' Lorcaserin Will Be A Blockbuster Drug Wed, Feb 29
Share this page
inShare0 Font Size: Email PrintComments (18)Register or Login to rate comments » novapharma Comments (21) You are mistaken about Arena (ARNA) having to wait for the DEA to conclude their study and disclose the findings. Arena's marketing partner, Eisai Co. (ESALY - pink sheets) may begin selling BELVIQ immediately in both North and South America. 2 Jul, 11:23 AMReplyLike2 msapp Comments (14) Novapharma, Did you listen to the conference call on June 27 with ARNA after approval announcement? I believe the author is correct that they have to wait on the DEA because it was given a Class 4 and the DEA needs to give their assessment prior to marketing. ARNA is estimating that will take 4-6 months and then they'll be able to begin marketing. 2 Jul, 01:03 PMReplyLike0 udon918 Comments (8) Who will pay for the drug? Are patients willing to pay out of pocket for something that may or may not work, but which they have to try for 12 weeks just to see if they have thrown their money away? Will payers reimburse a drug which might not save the health care system money in the long term? Don't forget that mmany of the 100 million obese individuals in the US are also from the lowest socio-economic classes, and could ill afford out of pocket costs in the hopes of losing 5% body weight. 2 Jul, 11:24 AMReplyLike0 tahalb Comments (163) The FDA considers obesity a deasease, therefore, any approved drug should have no problems being covered by insurance co. having said that, dont forget that the cost per pill is not going to be so high , therefore, a membeship to a gym that may require a long contract may not be any more expensive than the $200 or so that an obese person may spend on the drug (for 12 weeks)..The article is well written, and it is in line of most ARNA long's , the world wide need for this drug is un imaginable, and as far as VVUS Qenexa, I wrote a comment and I bet anyone, that VVUS will see a CRL on or before July 17th. There is no way the FDA will approve Qnexa , and it is already dead in Europe as the main ingrediant of Qnexa is banned ..so if you want to bet, bet on ARNA , it is the sure winner, it already proved it, so VVUS ..stop dreaming .. 2 Jul, 11:40 AMReplyLike5 phiremin Comments (2) udon918....
The weight loss industry is a multi-billion dollar industry. People spends huge amounts of money on diets that generally don't work in the long term and on weight loss "supplements" (i.e. herbal weight loss products) that are not FDA approved at best don't work and at worst are dangerous. An FDA approved drug that is proven to be safe and effective is huge 2 Jul, 12:18 PMReplyLike2 peter_parker Comments (16) Major private insurers will probably pay for Belviq, some might put it on a formulary tier requiring patients to bear a big share of the cost. At least until they see it benefiting patients in the real world. 2 Jul, 11:27 AMReplyLike1 silverant Comments (15) A very long article to present absolute conjecture. 2 Jul, 11:36 AMReplyLike1 tabitha85 Comments (30) I thought that the article was very informative 2 Jul, 11:45 AMReplyLike3 andybaron Comments (69) The important point here is that even with modest efficacy, even with the requirement for out-of-pocket payments, the addressable market (in the U.S. and abroad) is so huge that just a tiny sliver of penetration will result in blockbuster sales. 2 Jul, 11:53 AMReplyLike1 TriciaD Comments (28) Today, I bought more PCYC. In my view, PCYC is the one biotech stock to buy now. I will not sell my PCYC. Rumors are flying about PCYC company. Read the literature, the research, go study the charts. PCYC is what to buy right now. In my opinion, PCYC is on its way to fly off the charts, and no end is in sight. Buy PCYC right now and do not sell to anyone. 2 Jul, 11:54 AMReplyLike0 mostlysnark Comments (2) Say PCYC three more times. 2 Jul, 12:08 PMReplyLike1 vzince Comments (6) tabitha, are you long arena? 2 Jul, 12:03 PMReplyLike0 constable Comments (30) Even if it is "absolute conjecture," I found it very helpful -- because it suggests how institutions might come to own the stock, and it suggests that I ought to think about my ARNA as a long-term investment, not a short-term bet on FDA approval, and so be willing to go through a fallow period.
I am looking for advice on what to do now / how to think about ARNA now, and so I find the article helpful.
(I suspect, silverant, that any article about ARNA's future would be equally absolute conjecture. If you've found one that isn't, I'd appreciate the URL.)
(I am long ARNA, at prices from around 2 to 9.75, and long VVUS at about 9 and 12. OREX too. So you can see that I need help in sorting out the future!) 2 Jul, 12:05 PMReplyLike0 bwyatt25 Comments (12) Great article. There also seems to be a great deal of market manipulation taking place by the large number of short sellers and hedge funds who have also got it very wrong about Arena and Belviq. I believe that Qnexa even if it is approved this month will be well behind Belviq as Vivus do not appear to be in any position to have a effective sales team in place and the drug. Qnexa cannot be prescribed to women of child bearing age, 16 through 45, a huge part of any market and I believe if it is approved, ( by no means certain), it will be hamstrung with restrictions and further data studies due to it's many potential serious side effects. IMO. 2 Jul, 12:14 PMReplyLike1 lbashaw Comments (12) This writer is absolutely delusional. Almost criminal assumptions.
10b is absolutely wrong in every way. 2 Jul, 12:26 PMReplyLike0 labratsuccess Comments (9) A very long article to present the possibilities and likely possibilities for investors of ARNA, unlike the frequent bashers and Hedge Fund sympathizers whose comments are very transparent and make their living off of trashing science, innovation and business while creating a reality that only exists long enough for them to steal shares of retail investors through "Bear Raids", manipulation and distortion of news, manipulation of share prices through naked shorting, or any other means available to them.
Fortunately, science, innovation and business defeated these "sewer rats", and with this Belviq victory, obesity and diabetes are the real winners and thus a plurality of kids and adults.
C. Brown
Minnesota 2 Jul, 12:34 PMReplyLike2 TriciaD Comments (28) Go look at PCYC. In my view: PCYC is going through the roof. Rumors are everywhere regarding PCYC. Buy PCYC now and do not sell to anyone. PCYC: Astounding. 2 Jul, 12:34 PMReplyLike0 robanio Comment (1) Whether you like it or not, ARNA is going to hit big. It is just a matter of time. If you have patience ( 1-12 months ) buying this stock is gold. The only drug being approved in 13 years and still doubting it's strength is not a very smart idea. Of couse the greedy corporates will keep playing with it's stock price for sometime to scare off the small investors and bring the stock price down so that they can invest big money in it and get more richer. 2 Jul, 12:56 PMReplyLike1 Load All CommentsCancel
GuestAdd Your Comment: Publish Submitting comment, please wait ... About the author: KLLJ Investments KLLJ is a private investor focusing on small cap stocks in biotechnology, emerging markets and renewable energy. I have been an active investor for 15 years and focus on picking stocks with tremendous upside. I enjoy sharing my thoughts in forums such as Seeking Alpha to help with my own due... More
Blog: Never Trust the StreetKLLJ Investments
Articles (20) Instablog (7) Comments (74) Profile 420 Followers
16 Following FollowSend Message KLLJ Investments
Stop FollowingKLLJ Investments
5 more minutes to this BS bear bear raid! Will turn around
You have nailed it. Sherlock Holmes could not have wrapped it up so tightly.
RECEIVER PLEASE READ!
Arna CEO on cnbc at 3.30.
To open at 1.45 !! per cnbc
!!! Area Approved!!!
For us, is that good or bad ?
I just sold my Jul 7 calls at $3.40.
Why are the calls that high?
Why buy my calls, which will cost him $10.40, When he can buy the stock in the 9s??
Somebody know something?
DSU
WOW! Thank you for your answer. You knocked my socks off!!
DSU
If Texas can not interfere with Delaware courts, the same goes for the Delaware courts regarding Texas.
I'm refering to the 100 mill awarded to DD by Texas (buddy) judge.Can that be voided?
I would love to see shareholders go to court on that one. Can receiver do that for us?
We know who and why they are selling.
Who and why are they buying?
I do not know how a bear raid works.
Its evident that shorts want this stock down. So if they are already short,where are they getting stock to sell? They have to borrow. If they are borrowing,aren"t they increasing their short positions?
Sorry, just generally speaking. was not directed at you
To the winners here
You guys are acting pretty smug, instead of being thankfull.
I need this one to offset the bs I've been thru.
I:m still fearful that this all could blow up!
My problem, do I bail now, and watch the parade pass me by,or do I stick around and pray this is the one.
They are filling large share orders in 100 share lots, ie.1000 share order filled by 10x 100 share pieces.
where the hell are all these sell shares coming from?They are beyond desperate. They are throwing everything at us including tne kitchen sink.
But we will prevail.
I;m with you there. Its just that the big guys keep beating up on us little people. They will not even leave us crumbs.
HA
You guys are still a bunch of pollyannas.
Too much money involved.
I pray for a miracle against greed.
Why are all these guys still shorting in these big numbers? They are idiots!
Who is going to represent CLYW at the Marksman trail
The receiver?
I love ya!~
I thought that you were one of the people around here that was grounded and knew what was going on. I know you believe in the rule of law and all that, and all rightous people will act accordingly.
But didn't see what was happening to clyw in the last 6 years.?
ALL I want to know, does the BOD still exist!!
So do I, but DD just will not go away.
Not to my satisfaction anyway. Somebody, please pronounce him dead,inso far as clyw is concerned.
Does Calypso's BOD still exist?
As of 4/12 it does.
That is the day that Storm submitted to the court, in that clyw was the lead plantiff in the matter of a mediator for the CO. He could not do this without the permission of the BOD.
Who is the BOD?? ..DD thats who.
Everybody thinks that now that there is a receiver involved all is well.
Far from it. The receiver is only here to gather the co.s assets and distribute them evenly.
I beleive there is a clause that states that whatever he comes up with,he must present to the co. for approval. Who the hell is the CO!! Its the BOD!!
Who is the BOD! its DD!!
I don't see anywhere where the judge dissolved the BOD.
IF this co. has been killed, Why the hell is Storm representing this Co as of 4/12/2012
I'm with you on this one.
why in the world, would our receiver mediate with DD's judge? over what? The receiver should press charges against DD. Take away his ill gotten shares,awarded by an illegitimate BOD.
He wants to take this back to Texas, yet! what balls.
We are talking billions here.
Why Texas? We came to life in Delaware.
Pedigree , where money is concerned,can be compromised, more so if a friend is involved.
How can DD have the balls to use the unelected, illegal BOD of clyw as a co plantiff in his naked try to get this mediation, back to his home turf.
The reciever is gonna have his hands full with this guy. If he deems that the illegal board was out of bounds giving DD everything except the moon.He is going to scream like a stuck pig.
The sooner the better he puts this guy in his place.
Just heard the nightly news. They said fracking for oil may cause earthquakes.Are we in the F%$#ing fracking business?
We know that this stock is a manipulated possible scam. Was todays action the final pump and dump or is there still a little more they want to squeeze out of this play.
I say they ain't through yet.
Some one please explain to me what the hell Storm is doing in the middle of all this?
He was always anti shareholder and DD's front man.
Scottrade ... a month ago
I see dead people.
Conspiracy theory.
When this judge made his old law firm the reciever for this case. the red flag went up for me.
He sure did hand his old cronnies a sugar plum. It will help pay back the money they surely gave him
to help him get elected judge.
A law firm makes money by charging an hourly wage. No contingency deal here.
So what does a good law firm charge? .$750- 1000 an hour? The sky is the limit here.
They have a clear field here, so they charge $1,250 an hour.So, there it is,an 8 hr day is $10,000!!!Is $50,000a week a reality? Thats $200,000 a month. He has had this case two months so far,so the firm has clocked $400,000. If I were them I would go on for months.
That"s hourly wages! Is there a clause that says that they get a percentage of the price,when they find a buyer?
And when all is said and done, and a bill which could go into the millions is presented to the court for approval, guess what judge is gonna sign off on it?? Just saying. IMHO
Hey DD! Now that you are a common shareholder.how does it feel gettting screwed,like you have been doing to us for years. YOu are one dumb, greedy loser.
What are guys talking about?,sueing the BOD. All those guys put together couldn't come up with $5,000 cash.They were all losers, hopeing to cash in on the big scam.
What are you gonna get out of Turrini,he is almost homeless.
The fat cat here is DD, and he was not on the BOD. He should be sued for interference in co. matters,and Jail Time for intimidation of court witnesses.