![](http://investorshub.advfn.com/images/default_ih_profile2_4848.jpg?cb=0)
Wednesday, April 18, 2012 10:13:03 PM
ARNA’s marketcap is now under $400M 3 weeks before the panel. So did briefing docs leak and they are BAD? Or is this just professionals taking advantage of a highly liquid issue without much institutional support, take out stops, rape retail, make a ton on the volatility and reposition prior to May 10th? I hope so. I didn’t read Adam’s article because I doubt he is going to shed light on anything I don’t already know about the risks here. Sticking to your due diligence and investment thesis is sometimes the hardest thing to do. The others of course are selling when you think the valuation is too high and taking a loss when you should. I’m not buying any more here because I doubled-down in the $1.20’s and don’t need to. I’ll still sell some stock prior to the May 8th release of the BD’s to minimize exposure and hopefully we are higher than we are right now but we still could be stuck here. In fact, even after approval, perhaps the marketcap only goes up to $1B.
The unfortunate truth is that ARNA is going to be subject to a lot of volatility until it is finally approved and perhaps even until it is on the market generating real revenue. Nobody knows what the true valuation of ARNA should be until you have real market growth numbers of weekly scripts being written and what the margin numbers will be. Is ARNA a $2B company if lorcaserin is approved and doing $200M a year in sales? Or is ARNA a $20B company if lorcaserin takes off and all indications show that it will be a $5B drug in 2015? We don’t know and certainly AF doesn’t know.
What I do know is that lorcaserin met one of the “either / or” criteria for approval. I know that there were no SAE and CV signals across 8K patients that I saw. I know that it showed a lot of benefit for Type II diabetics and there are 20M of those people in the US with another 50M pre-diabetics to market to. I know that the FDA hasn’t approved a new weight loss drug in 13 years and that one has nasty side effects with it. I know there is a lot of pressure on the FDA to approve something and Qnexa, despite a positive note, is not a done deal because of major issues to come up with an appropriate REMS. I know that 66% of America is overweight and if there is 1% market adoption, the drug is a blockbuster.
There are major risks here. ARNA is a hated stock by many who are convinced it will never see lorcaserin approved. We still don’t know if the FDA is ready to approve a new drug, even with the pressures they face. There could be new gotchas we don’t know about. The FDA may have valvulopathy and cancer concerns like some analysts say. So the safest bet of all is to not play and wait for approval to buy. If you think it is a market success, you can still make good money. Everyone has different risk tolerance and investment situations. I can afford to risk money here and not cry if I’m wrong. I’ll still be able to pay bills, send my kids to college and not have to move into a cardboard box. Don’t risk what you can’t afford to lose or causes you to lose sleep. If you can’t stand volatility, don’t invest in biotech. Good luck to all of us and may the longs be right this time…
Last Shot Hydration Drink Announced as Official Sponsor of Red River Athletic Conference • EQLB • Jun 20, 2024 2:38 PM
ATWEC Announces Major Acquisition and Lays Out Strategic Growth Plans • ATWT • Jun 20, 2024 7:09 AM
North Bay Resources Announces Composite Assays of 0.53 and 0.44 Troy Ounces per Ton Gold in Trenches B + C at Fran Gold, British Columbia • NBRI • Jun 18, 2024 9:18 AM
VAYK Assembling New Management Team for $64 Billion Domestic Market • VAYK • Jun 18, 2024 9:00 AM
Fifty 1 Labs, Inc Announces Acquisition of Drago Knives, LLC • CAFI • Jun 18, 2024 8:45 AM
Hydromer Announces Attainment of ISO 13485 Certification • HYDI • Jun 17, 2024 9:22 AM