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AMA Classifies Obesity as a "Disease;" Obesity Drugs Now Could be Covered

  +Follow June 20, 2013 2:51PM
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BurgerOn Wednesday, the American Medical Association (AMA) officially declared obesity to be a disease. The AMA currently defines obesity as having a Body Mass Index (BMI) of over 30. At previous points, the AMA had referred to obesity as a “major health concern,” a “complex disorder,” and an “urgent chronic condition.” But moving obesity classification of “disease” will have several implications. Notably, if obesity is no longer considered merely a lifestyle choice in need of tweaking, insurance companies could be required to cover the cost of weight loss drugs. According to Vivus, approximately 30 percent of insurers cover its obesity drugs. Some providers such as Aetna (AET) and Blue Shield do include coverage for weight loss drugs, but this new definition could cause that number to rise significantly.

This is news that could affect pharamceutical companies such as Arena and Vivus significantly.

Arena Pharmaceuticals, Inc. (ARNA)

This San Diego-based biopharmaceutical company could be a major beneficiary of the ADA’s declaration. On June 27,2012 the FDA approved the obesity-reduction drug lorcaserin, which will be marketed by Arena under the name Belviq. Belviq stimulates serotonin so patients feel satiated, and thus more full after meals.

Arena announced last week that after a few delays, they’d finally be rolling out Belviq. Since obesity is now considered a disease, Belviq could be covered under most insurance plans that currently force patients to pay out of pocket for obesity-reduction drugs. Belviq was specifically approved for patients with a BMI over 30, or people with a BMI over 27 who suffer from at least one obesity-related condition like high blood pressure, type-2 diabetes, or high cholesterol, which fits neatly into the AMA’s new parameters for defining obesity.

Arena suffered a setback earlier this year when they withdrew the European Union application for Belviq. Their stock opened the day at $7.60 a share on moderate trading, and is down nearly two percent on the day. Their next earnings report is August 7.

Vivus, Inc. (VVUS)

Mountain, California based Vivus beat Arena to the punch in the obesity pharmaceutical battle, rolling out their own drug Qsymia last September. And Qysmia, a combination of phentermine and topiramate, has been shown to produce weight loss more effectively than Belviq. Qysmia is currently also approved by the FDA for patients with a BMI over 30, or over 27 with blood pressure, type-2 diabetes, or high cholesterol.

Qysmia though, has faced sluggish sales despite outperforming Belviq on weight loss effectiveness. Analysts have speculated this might be due to Qysmia’s side effects, which include drowsiness, increased heart rate, and increased chance of birth defects for pregnant women. Belviq has a relatively clean safety profile in comparison.
Vivus opened the day at $14.15 a share and is seeing above-average volume. This is well down from Vivus’ high posted on July 18, 2012 of $31.21 a share. Their next earnings report is August 5.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for ARNA
Stockaholics
23 Oct 14 01:20:58
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Jet Life PennyStock$
23 Oct 14 01:08:07
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Jet Life PennyStock$
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explodeprofits
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22 Oct 14 20:43:09
@counsel0857 @PipsToDollars $ARNA plus all these https://t.co/Sj2HnH5ccH are the big board pot stocks
John Gaeta
22 Oct 14 15:25:23
@adamfeuerstein My old friend. Miss the biotech craze of 2012 and you weekly $ARNA sell reiterations. Missed you too @JimCramer
Stockaholics
22 Oct 14 13:58:20
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $TECD $ARNA $AET
Trent Blair
22 Oct 14 12:50:32
RT @moonshine_mist: @TrentBlair19 $ARNA is another.
Mist Man
22 Oct 14 12:48:39
@TrentBlair19 $ARNA is another.
biogemfinder
22 Oct 14 12:05:36
$ARNA while very disappointing, we R faring better than $VVUS & $OREX today. I guess the incoming catalysts are keeping the beers away! $PFE
Sharon Conklin
22 Oct 14 08:55:10
$ARNA three articles bashing $ARNA today and it holds it's own, Pump for other stocks with obesity drugs not working today $OREX $VVUS
Sterph1
22 Oct 14 08:50:59
$ARNA back to $4.17 meander - needs an actual headline for itself or bad news for a peer. Fresh out of either so expect it stuck here a bit
Sterph1
22 Oct 14 08:24:14
Sure just a coincidence but have made a few bucks playing $DNKN when $OREX and $ARNA are flat to down. Again today. Mmmm, donuts
James P Worthy
22 Oct 14 08:02:52
$ARNA 4 High-Gross Margin Stocks: Arena Pharmaceuticals, Inc. (ARNA), Gastar ... http://t.co/Fcvl32pMl1
Samuel Brown
22 Oct 14 08:02:51
$ARNA Could Arena Pharmaceuticals Inc. Be Running Out of Money? http://t.co/9cHC6xMNVy
Jan(McMorris)Manimoi
22 Oct 14 07:43:15
RT @SeekingAlpha: Assessing Arena Pharmaceutical Belviq Sales And The Impact Of TV Ads http://t.co/aYWHRtIsvi $OREX $VVUS $ARNA
Beak Snot
22 Oct 14 07:01:01
RT @SharonAConklin: $ARNA Early weight loss while on Belviq means good efficacy moving forward. http://t.co/x4cxUTtwmB
Beak Snot
22 Oct 14 07:00:16
$ARNA $ESALY #Beliviq #Lorcaserin Safety and Efficacy of Lorcaserin: | Postgraduate Medicine https://t.co/sznEyfJkG2
Joey
22 Oct 14 06:50:33
$arna more of the same bs from pretender long... Great buying opportunity!
FARES EL AROUI
22 Oct 14 06:16:55
RT @SeekingAlpha: Assessing Arena Pharmaceutical Belviq Sales And The Impact Of TV Ads http://t.co/aYWHRtIsvi $OREX $VVUS $ARNA
Bull Logic
22 Oct 14 06:16:32
RT @SeekingAlpha: Arena Investors Need To Watch Contrave Launch Closely http://t.co/BPQceB3ZKh $OREX $ARNA
Seeking Alpha
22 Oct 14 06:16:22
Assessing Arena Pharmaceutical Belviq Sales And The Impact Of TV Ads http://t.co/aYWHRtIsvi $OREX $VVUS $ARNA
FARES EL AROUI
22 Oct 14 06:09:23
RT @SeekingAlpha: Arena Investors Need To Watch Contrave Launch Closely http://t.co/BPQceB3ZKh $OREX $ARNA
Seeking Alpha
22 Oct 14 06:08:47
Arena Investors Need To Watch Contrave Launch Closely http://t.co/BPQceB3ZKh $OREX $ARNA
Sharon Conklin
22 Oct 14 05:42:39
$ARNA Peer reviewed journal - No apparent increased risk of Valvulopathy from taking Belviq (Lorcaserin) https://t.co/WnM6zTEqvr
Sharon Conklin
22 Oct 14 05:15:48
$ARNA Early weight loss while on Belviq means good efficacy moving forward. http://t.co/x4cxUTtwmB
EyeBeThere
22 Oct 14 02:54:13
RT @SharonAConklin: $ARNA Listen at 11:00 John N. http://t.co/SE0ou8x1mC
Jet Life PennyStock$
22 Oct 14 01:29:12
Dollar$OnPennies: $ARNA Weekly http://t.co/52g2c2xSWE
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22 Oct 14 01:18:50
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21 Oct 14 19:09:00
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carl s
21 Oct 14 18:22:19
RT @biogemfinder: $ARNA a lot of effort to keep it neutral to red. Belsmoke and Belphen is going to kill the remaining stupid shorts $PFE m…
carl s
21 Oct 14 18:20:46
RT @SharonAConklin: $ARNA Listen at 11:00 John N. http://t.co/SE0ou8x1mC
Pavos Roble
21 Oct 14 15:33:17
@optionmonster $arna FOG Equities ?? reverse conversion. 600,000 shares at 6.305 on CHX vs 6000 Jan 9 puts at 4.80 and 6000 Jan 9 calls ????
IPHawk
21 Oct 14 12:53:03
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biogemfinder
21 Oct 14 12:51:28
$ARNA a lot of effort to keep it neutral to red. Belsmoke and Belphen is going to kill the remaining stupid shorts $PFE must be in talks
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21 Oct 14 12:45:05
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21 Oct 14 11:32:09
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Sharon Conklin
21 Oct 14 05:53:42
$ARNA Listen at 11:00 John N. http://t.co/SE0ou8x1mC
Jacob Plieth
21 Oct 14 03:14:28
$ARNA RT @YoniFreedhoff: This is not good news for the newly approved weight loss drug Belviq (Lorcaserin): http://t.co/p3PPup9wRg
WallStreet Pennies
21 Oct 14 01:08:46
Dollar$OnPennies: $ARNA Weekly http://t.co/SoWffFBIy7
				
				
  +Follow June 20, 2013 2:51PM
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