A graphical representation of current market penetration and blockbuster status
This post was updated on .
Very simple diagram to screw your vision up...
There are 992 dots on this image. Each one represents about 65,000 obese Americans. One of these dots is partially blue in color. This is the current market share estimate for Belviq. This MAY be a little high since there will be non-responders, but this is based upon script data that we have seen so far. I am using 40K patients on Belviq for the current market penetration. If we are not there yet we will be soon. It really does not matter.
What matters are the GREEN dots. If Belviq was to penetrate into the obesity market to the extent that is represented by these green dots (plus completing the blue one), then Belviq will have achieved blockbuster status with 650,000 patients. This would support a share price of 24-30 based upon a non-forward looking PE of 12-15.
Just something to look at... but not for too long or you will start to hallucinate.
Re: A graphical representation of current market penetration and blockbuster status
This post was updated on .
One more optical illusion for you.
Same chart. This time, we see a lot more green dots. This represents the market penetration that Phen/Fen had back in 1996 prior to being pulled due to the non-selectivity of fenfluramine. Just so you know, lorcaserin (Belviq) was specifically designed to address the issue with fenfluramine. Think of Belviq as fenfluramine with an excellent safety profile. Lorcraserin shows it in the lab and has proven it in the trials.
So, this chart shows 3.75% market penetration. That is based upon the fact that in its best 12 month period, Phen/Fen was being dispensed to the tune of 18,000,000 scripts. I am ASSUMING that these were all 30 day bottles. If they were 60 day supplies and each fill counted as one script then the market penetration would be 7.5%. So, I will stick with the SAFE and conservative number - 3.75%. Keep in mind that in 1996 there were about 50 million fewer people in the U.S. and the obesity rate was about 27%, not the 35% we see today.
If Belviq were to achieve this degree of market share then Arena would be worth around 85-100/share. I am NOT saying this is going to happen. But, I am saying that the obesity market was reached to this degree with Phen/Fen just a little more than 15 years ago. And that took place in a day and age in which pharmaceutical companies did not even do DTC advertising (really got started in 1997). Here is what 3.75% of the market would look like in graphical form.
On all accounts of reason and logic, Belviq should do well.
But investors must be spooked by the 60 million shorts,
who(the shorts) have ironically been vindicated by dropping share price, ever since achieving their approval.
This is my first foray into the bio shares, and I am intrigued by the share price in correlation to certain key go-to-market processes involving the FDA.
You walk into a room full of 1000 obese Americans. You step up to the microphone and announce that there is a well-tolerated drug that can help them gain control over their appetite. You tell them that 40% of them will be able to get their insurance to cover it. You tell them that they could realistically expect to lose between 8 and 16% of their weight in 12 months if they took Belviq. You also tell them that if they are pre-diabetic then Belviq may be all they need to LOSE that diagnosis. You tell them that if they ARE Type II diabetics that they may even be able to cut their other meds down when they take Belviq.
You get this message out to 1000 people in the room.
In order for the shorts to be right - 998 have to say "No". If two say "yes' then you are STILL selling 30,000 scripts per week.
Listen up shorts... here's the kicker...
NINE-HUNDRED-NINETY of the 1000 can say "HELL NO!" and the TEN that say yes will make Belviq a blockbuster.