Still, Europe has plenty of incentives to do something about its growing crisis. With obesity rates and spending outgrowing both total health care spending and the increase of doctors, many cash-strapped nations will have to cut back in other health care areas to attend to their obese populations in the future. Paying for a weight-loss drug is a lot easier than scaling back already strained health care budgets even further.
What’s at stake for Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)?
Of course, all these statistics can’t help when obesity drugs haven’t had a great history recently in Europe. A couple of approvals and subsequent withdrawals of medications haven’t helped European sentiment over obesity medications, and Arena’s Belviq is trying to break into a market that hasn’t been forgiving to these drugs lately.
Sanofi SA (ADR) (NYSE:SNY)‘s Rimonabant had shown significant weight loss, but after the FDA rejected the drug, Sanofi agreed to suspend Rimonabant in 2008 after the European Medicines Agency brought up questions over its safety. The EMEA later pulled Rimonabant in early 2009. Before that, European regulators pulled the marketing license for Abbott Laboratories (NYSE:ABT) Sibutramine back in 2010 regarding concerns about heart attacks and strokes related to the medication. Sibutramine had similarly shown significant average weight loss in patients, but safety concerns knocked it out of Europe’s good graces.
Qsymia’s seemingly out of the picture in Europe now, but Belviq’s sterling safety record should protect it from the same concerns that sank Sibutramine and Rimonabant across the Atlantic.
But what kind of opportunity is Arena staring at in terms of dollars? France’s 15% obesity rate indicates a total of 9.8 million obese French. Snagging even 2% of that number, or 196,000 patients, would bring in more than $39 million per month in sales at Belviq’s $200 per month wholesale price — and that’s just France! 2% of the entire obese French population is optimistic at best, but the sheer scope of Europe’s obesity crisis underscores what’s at stake for Arena.
All of the lofty estimates depend on Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)’s success in landing European approval. While no one knows for sure whether regulators will clear Belviq for launch across the Atlantic, what is clear is that the European obesity market is no less attractive than America’s despite its lower overall obesity rates. With such a massive crisis like this affecting all ages and impacting straining health care budgets so severely, Arena and its shareholders are looking at a potential gold mine no matter which side of the Atlantic you look at.
The article Arena Faces Europe’s Obesity Opportunity originally appeared on Fool.com.
Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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