Memorandum

Arena 4Q15 – Belviq (lorcaserin) revenues at $7.9 million, down 21% YOY and 14% sequentially; CAMELLIA completes enrollment and Belviq XR NDA accepted – February 29, 2016

Executive Highlights

  • Arena provided its 4Q15 update today in a call led by interim CEO Mr. Harry Hixson. Management reported that Eisai recorded Belviq (lorcaserin) revenues of $7.9 million, down 21% year-over-year (YOY) and down 14% sequentially; year-end revenues totaled $44.6 million, declining 0.8% YOY.
  • Management also announced that the CVOT CAMELLIA has reached its target enrollment of 12,000 patients and that the FDA has accepted the NDA filing for Belviq’s once-daily formulation (Belviq XR).

Arena provided its 4Q15 update today in a call led by interim CEO Mr. Harry Hixson. Management reported that Eisai recorded Belviq (lorcaserin) revenues of $7.9 million, of which Arena received $3.2 million, down 21% year-over-year (YOY) and down 14% sequentially. Regarding full-year revenues, Belviq sales totaled $44.6 million, declining very slightly by 0.8% YOY from 2014’s $44.9 million. According to the press release, IMS Health estimated ~131,000 prescriptions for Belviq in 4Q15 (a 17% sequential decline); Ildong Pharmaceutical estimated that ~2.4 million Belviq tablets were prescribed in South Korea, equating to ~40,000 one-month prescriptions (a 16% sequential growth). While revenues in 1Q15 and 2Q15 remained in double digits (holding up most of the year-end revenues), 4Q15 represents Belviq’s lowest quarter since 4Q13 – this may partly be due to seasonality but is still quite the grave decline from the company’s already poor report in 3Q15, which sequentially declined by 24%. Regarding other updates, management announced that Belviq’s CVOT CAMELLIA-TIMI 61 reached its target enrollment of 12,000 patients – in our eyes, the obesity market could greatly benefit from positive CVOT data and we are pleased to see that Arena/Eisai are moving forward with this trial, as such findings could help enhance payer coverage of obesity medications. However, these trials are slow moving and since we do not expect results until 2018, we likely will not see much movement in the near future. In addition, Arena announced that the FDA has accepted the NDA filing for Belviq’s once-daily formulation (Belviq XR), a product that has the potential slightly increase Belviq uptake due to patient adherence benefits. Arena was also granted an additional patent titled “Method of Weight Management,” further covering Belviq for chronic weight management – as Belviq is not made up of generic compounds, it is at lower risk of patent infringement than Qsymia (phentermine/topiramate extended-release; see Vivus’ challenges with this) or Orexigen’s Contrave (naltrexone/bupropion extended-release). While the CVOT and once-weekly formulation are small beacons of hope for Arena, we unfortunately do not see the company picking up steam anytime soon, with its recent cost reduction plan and lifecycle management program discontinuation.

Regarding the larger obesity class, Belviq and  Contrave sales totaled $20.9 million in 4Q15, a 27% YOY increase; year-end revenues for the two products totaled $98.1 million, a 91% YOY increase. However, it is important to note that Contrave only launched halfway through 4Q14, making year-end revenue comparisons essentially comparing one product vs. two products. Vivus just announced that its 4Q15 update will take place on March 9, at which point we will have a more complete perspective of the market.

 

-- by Melissa An, Sarah Odeh, and Kelly Close