In a research report released this morning, Needham analyst Alan Carr reiterated a Hold rating on Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), ahead of the company’s fourth-quarter results, which are expected to be announced in late Feb 2015. No price target was provided.
Carr noted, “Collaborator Eisai has reported ¥1.2B in F3Q14 Belviq sales (vs. ¥1.7B F2Q14). Eisai cited seasonality and a new copay strategy as causes for the decline. Prescription data suggest that the Takeda Contrave launch may also have had a modest negative impact on Belviq sales. We estimate $4.0M in revenues to Arena. Programs in the pipeline behind Belviq are beginning to impact valuation. We find early data from the S1P1 program to be intriguing, but we await additional details. We maintain our HOLD, but recognize opportunities for upside as the company evolves beyond weight loss.”
The analyst continued, “Our central concern with the weight loss space is lack of consumer awareness of new treatment options. Eisai recently adjusted its marketing strategy, placing less emphasis on physicians (Belviq sales force reduced from 600 to 450) and more on direct-to-consumer advertising. We expect this to help, but we have concerns that Belviq may ultimately have modest peaks sales as a weight loss agent. We have reduced our 2015 and 2016 Belviq sales estimates to $79.0M (was $129.0M) and $127.0M (was $210.1M). Label expansion to smoking cessation may be needed to reach blockbuster status.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Alan Carr has a total average return of 40.2% and a 71.8% success rate. Carr is ranked #6 out of 3510 analysts.