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Arena Rises as Much as 26% After FDA Letter on Obesity Drug Lorcaserin

Arena Pharmaceuticals Inc. rose as much as 26 percent after the U.S. Food and Drug Administration said it “regrets” the lack of an animal toxicity expert on an advisory panel that rebuffed the obesity drug lorcaserin.

“In hindsight, FDA regrets that no toxicologist participated in the meeting,” the agency said yesterday in a letter to Arena shareholders who had complained about the Sept. 16 meeting. Karen Riley, an agency spokeswoman, provided a copy of the letter today in an e-mail.

Lorcaserin, licensed by Tokyo-based Eisai Co., would be San Diego-based Arena’s first product. The companies are vying with Vivus Inc. and Orexigen Therapeutics Inc. to introduce the first prescription weight-loss drug in more than a decade.

The agency’s letter may provide optimism to investors that the FDA “isn’t blindly wanting to reject the drug,” Jon Lecroy, an analyst at Hapoalim Securities in New York, said today in a telephone interview. “They’re trying to do a balanced review of all the data,” he said.

Last month’s FDA advisory panel said in a 9-5 vote that the drug doesn’t work well enough to justify risks over time in overweight and obese patients.

Arena gained 21 cents to $1.67 at 2:45 p.m. New York time in Nasdaq Stock Market trading, after climbing as high as $1.84. Forbes reported on the letter earlier today.

Decision Pending

Arena has said it expects an FDA decision on lorcaserin today. The agency usually follows its panels’ recommendations.

While the advisory panel didn’t include a toxicologist, a “team of FDA toxicology experts” had reviewed Arena’s drug application for lorcaserin, the agency said in yesterday’s letter. The FDA staff review found that the drug was linked to “a number of malignant tumor types” in studies of rats, according to a Sept. 14 report. The staff’s findings were vetted by the agency’s Executive Carcinogenicity Assessment Committee and presented at last month’s advisory panel meeting, the FDA said.

Lorcaserin, if approved, may generate $728 million in 2015, according to the average estimate of two analysts surveyed by Bloomberg.

The FDA hasn’t approved a prescription drug for long-term weight loss since Swiss drugmaker Roche Holding AG’s Xenical in 1999. The agency is scheduled to decide on Vivus’s Qnexa by Oct. 28, and Orexigen’s Contrave by Jan. 31. Orexigen announced a licensing agreement with Osaka, Japan-based Takeda Pharmaceutical Co., Asia’s biggest drugmaker, on Sept. 2.

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.

To contact the reporter on this story: Molly Peterson in Washington at mpeterson9@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.

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