Arena Pharma (ARNA) Higher as M&A Chatter Heats Up
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Arena Pharmaceuticals (Nasdaq: ARNA) shares are strong in early trading on a positive report out of Bloomberg over the weekend.
According to the news source, the value of Arena could jump 18 times over the next four years following U.S. approval of its weigh loss drug Belviq (lorcaserin).
The drug is expected to draw about $2 billion in annual revs, according to Piper Jaffray. The potential makes Arena an attractive takeover target for pharmas like GlaxoSmithKline (NYSE: GSK) and Belviq partner Eisai. Glaxo has been selling Alli, but the drugs orlistat ingredient has some concerned it might lead to liver damage.
Belviq is the first obesity drug approved in the U.S. over the past 13 years.
Arena and Eisai will conduct six post-market studies to evaluate potential cardiac risks. In addition, DEA testing must be done to determine classification and its risk for abuse.
Revs in 2015 could multiply from $13 million in 2011 all the way up to $232 million. Bloomberg estimates high demand given expectations for 42 percent of the U.S. population to be obese by 2030, from about 33 percent currently.
Competitors vying for a piece of the obesity pie include VIVUS (Nasdaq: VVUS), with its Qnexa, and Orexigen (Nasdaq: OREX), which is currently conducting a two-year study of its Contrave to evaluate the drugs heart risks.
Shares of Arena are up 1.2 percent early Monday. VIVUS and Orexigen are also higher on the session.
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According to the news source, the value of Arena could jump 18 times over the next four years following U.S. approval of its weigh loss drug Belviq (lorcaserin).
The drug is expected to draw about $2 billion in annual revs, according to Piper Jaffray. The potential makes Arena an attractive takeover target for pharmas like GlaxoSmithKline (NYSE: GSK) and Belviq partner Eisai. Glaxo has been selling Alli, but the drugs orlistat ingredient has some concerned it might lead to liver damage.
Belviq is the first obesity drug approved in the U.S. over the past 13 years.
Arena and Eisai will conduct six post-market studies to evaluate potential cardiac risks. In addition, DEA testing must be done to determine classification and its risk for abuse.
Revs in 2015 could multiply from $13 million in 2011 all the way up to $232 million. Bloomberg estimates high demand given expectations for 42 percent of the U.S. population to be obese by 2030, from about 33 percent currently.
Competitors vying for a piece of the obesity pie include VIVUS (Nasdaq: VVUS), with its Qnexa, and Orexigen (Nasdaq: OREX), which is currently conducting a two-year study of its Contrave to evaluate the drugs heart risks.
Shares of Arena are up 1.2 percent early Monday. VIVUS and Orexigen are also higher on the session.
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