, ticker symbol ARNA
, is a drug company whose lead product is a weight loss drug called Belviq. Initially, the drug was rejected by the FDA, and the stock price fell all the way down to $1.54 in 2012. However, management did not give up on bringing the drug to the market. They cooperated with the FDA and finally got approval.
Once Arena got Belviq approved, the stock price went off like a rocket. It shot up to $10 per share in January 2013. A $1500 investment in Arena at the bottom would have become $9,750 if you had sold your shares at $10. Arena can also probably go to more than $20 per share in the next few years because there is a big need for weight loss drugs. The company also has the sales infrastructure and healthcare contacts to become a blockbuster drug.
Arena does have a competitor in Vivus (VVUS
) who also has a weight loss drug that has been approved by the FDA. However, Vivus does not have a good sales infrastructure like Arena, and the FDA has placed restrictions on their drug due to safety concerns. If you click on the VVUS ticker symbol above, you can see the wild ride in the stock price. One point to make here is that you must take some money off the table once you have made 100% for your money on a drug stock. Drug stocks are very volatile, but you can make a lot of money if you know how to play the game.