Tag Archives: ARNA

Arena – Good Sales, Bad Sales, Long And Short

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By Spencer Osborne:

When the discussion turns to Arena Pharmaceuticals (ARNA) there is no shortage of opinion, passion, and banter. This tends to happen with speculative stocks that gain in popularity. While many think it is an “us against them” situation, the savvy investor steps back, watches the ongoing battle and makes profitable trades along the way. Most of my articles are geared toward the short and mid term, active traders, and people seeking an entry point. Personally I have only made my initial buy at $7.32 and one sale (I sold half of my stake) at $10.50. If I were to apply my profits from the sale to Arena, my cost average is about $4.15.

Long ago I learned to minimize my attachment to any company. It was a hard lesson to learn, but it made me a better investor. I learned that no matter what I thought, or what my due


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First Manhattan Still Playing Hardball With Vivus

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By Spencer Osborne:

First Manhattan, an investor with about a 10% stake in Vivus (VVUS), has now taken the step of increasing its slate of Board nominations with the addition of a 9th nominee. Essentially, expressing disappointment in the current management and Board of Directors, First Manhattan is seeking to gain control of Vivus through a cherry picked Board of Directors.

The sparring match between First Manhattan and current management has been going on for months with each side seeming to take turns in a game of chess as the time-clock for the annual meeting winds down.

First Manhattan raises some pretty compelling points. Sales of anti-obesity drug Qsymia have been less than stellar, and even 7 months later have not gained the type of traction many investors had hoped for. Meanwhile, current management recently got the REMS restriction using only mail order pharmacies lifted by the FDA and can now distribute


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Arena Buyout More ‘Highly Probable’ Than MannKind

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ByChris_Roberts:

I was compelled to compare the buyout prospect of Arena Pharmaceuticals (ARNA) with MannKind Corporation (MNKD) after reading “Pricing A Highly Probable Takeover Of MannKind” by George Rho. Undoubtedly, late stage development and early-stage sales companies are ripe for picking, as the potential acquirer averts the early-stage risks. If chosen wisely, the gains can far outweigh the premium over the prevailing market price. In comparing the two, there are striking similarities – market capitalization, institutional ownership, short interest, novelty of their lead drug, and the potential future valuations. Mr. Rho contends MNKD could be worth over $11B in 2019, and an analyst at Jefferies Securities maps out a 2018 valuation of over $11B in 2018 for Arena. Arena seems to be the much surer proposition, and a take-over attempt seems much more likely to me. I see the potential price in hostile for Arena would be


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Arena NOLs Will Come Into Play Soon

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By Spencer Osborne:

It certainly did not take long for Arena (ARNA) investors to note a little statement regarding a change of control made by company management at the Bank of America Merrill Lynch Conference last week. I had my email inbox fill up with great questions and some perhaps over zealous statements about a buyout from Big Pharma in the near future.

While a buyout would be nice, there is an oft overlooked “asset” that Arena has that investors will want to begin to think about as the anti-obesity drug Belviq launches and theoretical profitable quarters begin to take shape. Arena is carrying over $1 billion in Net Operating Losses (NOLs). Net Operating Losses are accumulated during the years when a company is starting out, and can be used by that company to offset profits, this taking away tax liability in the years when profits begin to materialize.

Currently, Arena has


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For Arena, Sales Is Key

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By Spencer Osborne:

I have been saying for quite some time that while DEA scheduling was important to Arena (ARNA), it is the sales figures that will lead to movement in the share price of the equity. The reasoning is simple. Arena will now be making a big shift toward fundamental performance rather than simply being a pure speculative play. That does not mean that the speculative story for Arena is gone. It simply means that in the shorter and mid term we need to see sales to justify valuations that were speculatively applied over the past 10 months or so. Arena still has a pipeline of potential, but sales of the anti-obesity drug Belviq will be the key.

One reason that there has been a pause, and in my opinion a buying opportunity as the equity sits at about $8.00, is that the speculative phase of Arena set a very high


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Top Small-Cap Biotech Stocks Being Accumulated By Large Fund Managers

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By Ganaxi Small Cap Movers:

The SPDR S&P Biotech ETF (XBI) is up about 32% in the past twelve months, in new high territory, while the broader market is up about 18% during the same period. Within that group, many small-cap biotech stocks (those with market-caps of less than $2 billion) are up even more sharply. These small-cap biotech companies are generally considered very speculative and a risky investment, in contrast to large-cap and some mid-cap biotech companies that have well established commercialized product portfolios that generate revenues, and maybe even profitability. We believe it is significant when the world’s largest or mega money managers invest even a small portion of their portfolio in these small-cap biotech companies, thereby giving their seal of approval in what is otherwise considered a very risky investment.

These mega fund managers, such as Fidelity Investments, Goldman Sachs (GS), BlackRock Inc., Vanguard Group, and 23 others, manage between $100 billion


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Arena Short Story Getting Interesting

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By Spencer Osborne:

The short interest on Arena (ARNA) has been an interesting story for quite some time. While there are many that will consider a short squeeze a real possibility, the potential of one gets better when the days to cover the short position increase. With the latest short data, and thanks to lighter than average trading volume, the short story is once again getting interesting for savvy and active traders.

In the latest report, short interest actually went down while the days to cover increased. As stated, this dynamic is created by the recent low trading volume on Arena. Short interest went from 64.2 million shares to 62.3 million. The days to cover went from 9.08 to 16.76.

Regarding the short position, I am not a huge follower of the absolute number of shares short, but instead focus on the days to cover that position. The main reason I do not


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5 Stocks To Watch For Gains This Week

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By Brian Nichols:

Most retail investors who closely follow the market have certain stocks that they watch more intensely. Back before Spectrum Pharmaceuticals’ (SPPI) debacle, I used to say that I could pretty much tell you the days that it would rise and fall, based on whether it broke out towards the end of a session or if it sold-off towards the end of a session following a rally. The same can be said for countless other stocks, there are certain trends and trading tendencies that almost tell us when a stock might rally. With that being said, I am looking at five stocks that I follow closely, stocks that I believe could rally next week.

Spectrum Pharmaceuticals

Seeing as how I already mentioned Spectrum Pharmaceuticals, I might as well stay on topic, by saying that it could very well rise next week. The stock has now lost a mind-boggling 43% since


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