Arena Pharmaceuticals, Inc. (ARNA): 1 Biotech You Might Want to Explore Right Now!

In Alli’s second full year in the market, sales declined to just $131 million, almost half of the year prior. While this trend is opposite of what we often see in biotechnology, it is consistent with the fads of weight loss.

The problem with Alli is that it really didn’t work too well to create weight loss, but rather was effective at making people choose between food and its unpleasant side effects. The drug itself was believed to accelerate fast loss, but only helped users shed 3-5 pounds annually. This limited effect is most likely why it was unsuccessful. The big question is whether or not a minimally effective Belviq will stand the test of time; after its presumed initial pop.

How To Invest In The New Weight-Loss Craze

Personally, if I were looking to invest in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), I would definitely be buying now. Currently, I see no reason to believe that Belviq won’t create the same weight-loss madness that we saw with Alli, and that we see with new weight-loss books every month.

I expect significantly better than expected initial sales – but then the real question will be year two, three, and further down the road. In my opinion, with Belviq producing weight loss of just 4%, I don’t think it will stick long-term. Moreover, I think Vivus’ Qsymia then becomes interesting, as it produced weight loss of 10%.

Due to Qsymia’s marketing restrictions, many people don’t even know that it exists. Thus, Belviq could actually benefit Qsymia, as consumers become educated about current drugs available in the market. Overall, this looks to be a fragile space, one in which I would invest with caution, but one that I expect to produce short-term returns for Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)– but then long-term questions.

Brian Nichols has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article 1 Biotech You Might Want to Explore: Right Now! originally appeared on Fool.com.

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