The Good News, Bad News for Belviq: Bad News First...

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Arena Pharmaceuticals and its lead product, weight loss drug Belviq, have had a difficult run since Belviq's launch in June. On its recent conference call, Arena's marketing partner Eisai reported anemic third-quarter Belviq sales of only $4.8 million. Arena realized less-than-stellar net Belviq revenue of only $2 million. Not surprisingly, Arena's earnings for the third quarter failed to impress as prescription sales continue on a somewhat mediocre trajectory in this early phase of its sales launch.

These numbers are surprisingly low given the growing number of patients struggling with obesity and a general lack of strong weight loss drug options. Some Arena supporters have estimated potential peak Belviq sales in the billions and had set generously high expectations for physician interest and adoption of the new therapy prior to Belviq's launch.

Unfortunately, this sunny outlook has yet to materialize in reality. While I believe Belviq will ultimately succeed in finding a place in the weight loss niche, investors may need to consider a few barriers that will undoubtedly continue to delay Belviq sales growth at least into the short and medium term.

Harder than it sounds
While millions of people struggle with weight loss on a daily basis, the truth is that physicians simply do not look to prescribe medications right away when addressing a patient's weight. Diet and exercise still remain the workhorses of weight loss therapy.

This a bit of no-brainer as lifestyle changes produce the best results without risk of harmful side effects or the burden of drug monitoring and copays. Many patients with serious obesity issues are already taking medication, and having one fewer to worry about is often enough to give relatively easy lifestyle changes a go first. In comparison, clinical weight loss guidelines warn health care professionals to only exercise drug therapy in "carefully selected" patients.

This may seem like a small thing. The benefits of living healthier are well recognized, and drug companies exploring the weight loss space including Arena, VIVUS , and Orexigen have never implied that their products should replace healthy behaviors. However, what they may not have considered is just how entrenched these non-pharmacologic therapies are in the forefront of most physician's minds about addressing weight loss.

In many cases, drug intervention is an option used only for patients who have earnestly tried and failed to lose weight the old-fashioned way repeatedly. Sometimes this means that a patient will start a medically supervised weight loss program that kicks off with months of lifestyle and behavioral changes followed by an assessment of their motivation and technique and then another trial run of lifestyle and behavioral tweaks.

For some protocols, like the guidelines published by the Texas State Health Services, this could mean that a patient would undergo years of new diet and exercise regimens before being placed on medication. Even well-tread drugs like phentermine are essentially the third or fourth line option and this unfortunately places novel weight loss products even further down the list of options for the time being. 

Bottom line: Getting physicians to start using Belviq is harder than it sounds despite a surplus of obese patients.

Weight loss takes time
I think it's too early to say if investors should reconsider the sky-high expectations of the Belviq pre-launch estimations, but it's probably a safe bet that some time will need to pass before Arena can break the ice and start getting more commonly recognized as an option.

Physicians will most likely continue to trial Belviq with their most insistent or dangerously obese patients first before expanding their prescriptive patterns to include Belviq as an earlier option. There are some very interesting developments (some clear winners, others not so clear) that could help push Belviq into the blockbuster category that I'll discuss in a later article.

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