Arena’s Lorqess: A Market Size Analysis
Rockford Coscia submits:
The week has finally arrived. This Thursday an FDA advisory panel will take on one of the most controversial drugs of recent memory. Arena’s (ARNA) Lorqess, also known as lorcaserin, will be evaluated ultimately on whether its benefits outweigh its side effects. I’ve written other articles about Lorqess’ valvulopathy “issue” and its odds of passing based on the Qnexa panel, but today I wanted to tackle the share price issue on approval by the FDA. My hopes are that this analysis will help readers to have a better understanding of where share prices should rest upon favorable panel review and ultimately if and when approval is gained. Let me start by saying that the potential sales estimation, and therefore underlying share price, is one of the most difficult estimations I’ve seen for biotechs. This seems largely due to the fact that, while obesity is a tremendously large potential market, it is grossly under treated. A statistician might say that the error bars associated with this sort of valuation are astronomically huge. Use the information presented here and elsewhere and come up with a figure you believe in and invest accordingly. Other attempts at this analysis have been presented here, here, and here.Complete Story »
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