Shares of Arena Pharmaceuticals fell after a Credit Suisse analyst slashed his forecasts for sales of the company’s weight-loss drug Belviq.
Analyst Lee Kalowski said sales of Belviq in the third and fourth quarter will be far short of his previous estimates, and he also cut his annual sales projections for the drug through 2018.
Based on prescriptions data from July through September, Kalowski said he thinks demand for Belviq was around $3.5 million during the quarter. He said Arena will get less revenue than that because of discounts and because wholesalers still had pills they hadn’t sold.
Kalowski rates Arena shares at “Underperform” and cut his price target to $4 per share from $5.
The analyst said he thinks net sales of Belviq totaled about $3 million in third quarter, down from his previous estimate of $19 million. He cut his fourth-quarter estimate to $12 million from $36 million and now says sales will reach $157 million in revenue in 2014 and $325 million in 2015. Kalowski had forecast $285 million and $459 million in net revenue for those years.
The Food and Drug Administration approved Belviq in June 2012 for adults who are obese or who are overweight and have at least one serious medical condition, such as diabetes or high cholesterol. It was the first new drug approved by the FDA for long-term weight loss in more than a decade.
However Arena Pharmaceuticals Inc. and its partner Eisai Co. were unable to sell the drug for about a year after its FDA approval because the Drug Enforcement Administration had to assign a classification to Belviq.
Belviq was ultimately deemed a Schedule IV controlled substance, meaning it has a relatively low potential for abuse.
Date: September 30, 2013
Source: Associated Press
