Pill Economics - Research Report on Arena Pharmaceuticals, Inc. and Amgen, Inc.

  Pill Economics - Research Report on Arena Pharmaceuticals, Inc. and Amgen,
                                     Inc.

Shares of Arena retraced double digits after questions on its weight loss pill
arise, but is expected to bounce back soon. Amgen meanwhile is looking to
maintain its valuation

PR Newswire

NEW YORK, January 23, 2013

NEW YORK, January 23, 2013 /PRNewswire/ --

The European Medicines Agency, the continent's equivalent of the US's Food and
Drug Administration, is voicing out concerns about Arena Pharmaceuticals,
Inc.'s (NASDAQ:ARNA) [Full Research Report]^[1] weight loss pill, Belviq due
to alleged side effects like tumors and psychiatric events. Consequently,
stock fell as much as 11 percent to fall below $9 per share.

The company has to prove the European agency and the Committee for Medicinal
Products for Human Use - who discovered the side effects - that the slight
variations in those side effects are relative to placebo and means nothing
compared to the benefit of the drug. With this, Arena is expecting a final
decision on EU approval in the first half of 2013.

However, a report from Motley Fool is showing optimism on the company's part,
believing that the price reduction after the early January 2013 surge could
help bring it back above the $10 range. This is due to the stock price
recently breaking out of the $8-$9.50 range it stayed for more than six months
last year.

In addition, Arena has sparked the interest of hedge funds, with some recently
buying stocks in bulk. Roughly 29 million shares have been acquired by hedge
funds in the previous quarter, led by Wellington Capital. Their movements were
instrumental in the previous price bump.

Meanwhile, another biopharmaceutical firm Amgen, Inc. (NASDAQ:AMGN) [Free
Research Report]^[^2^] has seen its stock price and revenues increase to
$83.29 and $4.32 billion, respectively, but has been downgraded to "neutral"
from "outperform" by Zacks. The target price was also lowered to $86 from
$100.

The investment research firm says they are concerned about Amgen's dependence
on Prolia/Xgeva for long-term growth, which are some of the company's several
key products expected to lose patent protection in the following years.

However, other analysts remain confident with the company's stock by retaining
the "buy" or "outperform" rating, with a target price of $95. Twelve gave a
"buy" rating, two with "overweight", and sixteen with "hold". In average,
Amgen is rated "overweight" with a consensus price target of $94.52.

In addition, a quarterly dividend was recently declared at $0.47 per share
scheduled at March 7th and an annualized dividend of $1.88. This is an
increase from Amgen's previous quarterly dividend of $0.36. Amgen has $1.13
billion worth of stock held by ETFs, and has a yield of 2.17 percent.

Reference Links:

^[1]The Full Research Report on Arena Pharmaceuticals, Inc. - including full
detailed breakdown, analyst ratings and price targets - is available to
download free of charge at:
[http://www.nationaltradersassociation.org/r/entire_report/9516_ARNA]

^[^2^]The Free Research Report on Amgen, Inc. - including full detailed
breakdown, analyst ratings and price targets - is available to download free
of charge at:
[http://www.nationaltradersassociation.org/r/entire_report/7b3e_AMGN]

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SOURCE National Traders Association