Arena Pharmaceuticals’ (ARNA) recent FDA approval for its weight-loss drug seems to be overestimated by the market, as the weight-loss benefits are in the 3% range, there is a large patient copay for the drug and there is significant lack of insurance domestically, says Boris Peaker, Executive Director and Senior Analyst at Oppenheimer & Co. Inc.
“The drug on a placebo-adjusted basis helps people lose roughly 3% of their body weight, or something on that order — some are little more, some are little less, and that is on top of exercise and dieting. So while that was enough to show statistical benefit for the FDA, we think when the patients actually won’t continually take the drug due to a significant copay,” Peaker said.
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Peaker has a “market perform” rating on ARNA, and he says the potential for the new drug is highly limited due to copay, the current macroeconomic environment and the general lack of insurance. He says, however, many people are excited about the drug because of the obesity epidemic, and that’s one positive for the company.
“It’s going to be on the market, and it’s not a question of risk bringing a drug to market. When it comes to weight loss and antiobesity drugs, historically as you know, there’s a large target population perhaps, but in practice those drugs tended to have very limited commercial value,” Peaker said.
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