Arena Pharmaceuticals Inc.’s experimental diet pill may cause cancer and works only by a ‘slim margin,’ U.S. regulators said, sending shares down the most ever.
The medicine, lorcaserin, was linked to “a number of malignant tumor types” in studies of rats, Food and Drug Administration staff said in a report released today. The drug helped people lose 3 percent more weight than a placebo, short of the recommended 5 percent, the agency said.
Arena and partner Eisai Co. are racing against Vivus Inc. and Orexigen Therapeutics Inc. to introduce new treatments for the one-third of Americans who are obese. Lorcaserin is similar to fenfluramine, a component in the diet pill fen-phen that was withdrawn from the U.S. market in 1997 because of links to heart-valve damage.
“The big surprise to us here is the cancer thing,” said Jon Lecroy, an analyst at Hapoalim Securities in New York, in a telephone interview today. “Knowing the drug doesn’t work that well, I knew the safety concerns would be looked at extremely closely.”
Arena fell $2.72, or 40 percent, to $4.13 at 4 p.m. New York time in Nasdaq Stock Market composite trading, their biggest decline since the stock began trading in July 2000. Before today, the San Diego-based company had almost doubled this year.
An FDA advisory panel will review the staff findings on Sept. 16 in Adelphi, Maryland, ahead of the agency’s scheduled decision on approval next month.
Lorcaserin is Arena’s first product and has the proposed brand name Lorqess. Peak global sales may reach $800 million in 2015 if the drug is approved, Lecroy said. Eisai bought rights to sell the drug on July 1 and plans to give about a third of the revenue to Arena.
According to FDA recommendations released in 2007, medical products designed for weight management should help at least 35 percent of people lose at least 5 percent of their weight and double the proportion of the placebo-treated group, or they should work 5 percent better than placebo. Lorcaserin only barely satisfied the first criteria, and didn’t meet the second, the agency said.
“Lorcaserin did not satisfy the guidance’s mean efficacy criterion,” said Eric Colman, deputy director of the FDA’s Division of Metabolism and Endocrinology Products, in a memo to the advisory panel included in the staff report. The proposed ten milligram, twice-daily dose “did, by a slim margin, satisfy the categorical efficacy criterion.”
Two-thirds of American adults are overweight, raising their risk of diabetes, heart disease, high blood pressure and cancer, according to the 2008 National Health and Nutrition Examination Survey. More than one-third of American adults are obese, measured as a ratio between height and weight.
Lorcaserin binds to a receptor in the brain that controls appetite while avoiding a separate target thought to have contributed to irregular functioning of heart valves in about 30 percent of people who took Wyeth’s fen-phen.
Sales of prescription weight-loss drugs fell 11 percent last year to $153.7 million, according to the research firm IMS Health Inc. in Norwalk, Connecticut. Of the almost 7.5 million prescriptions dispensed, four of every five were for generic phentermine, a component of fen-phen still sold as a short-term appetite suppressant.
The last prescription diet pill approved by the FDA, Basel, Switzerland-based Roche Holding AG’s Xenical in 1999, has been linked to liver damage, and Abbott Park, Illinois-based Abbott Laboratories’ 13-year-old Meridia was tied to heart attacks, strokes and deaths in an FDA staff review yesterday.
The agency is scheduled to decide on lorcaserin by Oct. 22, Vivus’s Qnexa by Oct. 28, and Orexigen’s Contrave by Jan. 31. Orexigen, of San Diego, announced a licensing agreement with Osaka, Japan-based Takeda Pharmaceutical Co., Asia’s biggest drugmaker, on Sept. 2. Vivus, of Mountain View, California, failed to win the advisory panel’s backing for Qnexa in July.