Credit Suisse Bashes Arena Pharma (ARNA)
Interesting that CS chose to downgrade the obesity drug maker on the day of one of the biggest rallies in recent memory. The DOW rose +250 points, the Nasdaq +66 points, and the S&P 500 rose nearly +30 points today.
Shares of Arena were down -5%.
Kalowski, of Credit Suisse, initiated coverage of Orexigen with an Outperform rating and Arena with an Underperform. Kalowski already rates Vivus at Outperform.
Orexigen has a “favorable risk/reward profile around the pre-approval cardiovascular outcomes trial,” and Vivus as recent “concerns relate to matters that are not new.” But Arena’s prospects may not be as promising, says Kalowski.
“ARNA commendably ushered Belviq through FDA; we believe that sales (ARNA has an approximately 35% royalty) will fall short of the market’s lofty expectations,” he wrote.
Mastery Bottom Line
Mr. Kalowski of Credit Suisse must have written this little piece after snorting a fat line of bath salts.
Anyone who has been following Arena for a while knows that the stock has very low institutional ownership. In fact, around the time that Arena received its FDA approval for Belviq, it was approximately 20% institutional-owned. In the last couple of months it has risen to approximately 32%.
Credit Suisse doesn't have a crystal ball and neither do we. No one knows at this point whether doctors will prescribe Belviq more or Qnexa more. Arena has a lower risk profile so we tend to think that Belviq will be prescribed more, but again, we don't have a time machine.
This seems like a pretty blatant attempt from CS to hold the share-price down so intituitions can continue to back up the truck.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- Oil Breaks Below $80 | Financial Sense
- Life Lessons To Derive From QE And Stress Tests | ZeroHedge
- Technical Lines in the Sand; All Eyes on the FOMC | Financial Sense
- 15 Signs That We Live During A Time Of Rampant Government Paranoia | ZeroHedge
- Peak Empire 2.0 | ZeroHedge
- Sudden Bout Of Risk-Offness Sends European Shares Sharply Lower, US Futures Not Happy | ZeroHedge
- Core Capex Drops Most Since January; Durable Goods Orders Slide, Miss By Most In 2014 | ZeroHedge
The most relevant financial news and articles from the Internets
- The 10 Most Important Things In The World Right Now | Business Insider
- Here's What Was In The 5,000 Pounds Of Cargo Destroyed In Tuesday's... | Business Insider
- Notable... | StreetInsider.com
- Revenge Of The Nerds: Wall Street Cybersecurity Execs Are Getting Huge Raises | Business Insider
- Americans Are Costing Themselves Billions Of Dollars By... | Business Insider
- Check Out The New Boeing Dreamliner Richard Branson... | Business Insider
- Rocket failure casts spotlight on risks of space flight | Business Insider