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Arena Shares Rise After Lief Sees ‘Path Forward’

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Oct. 25 (Bloomberg) -- Arena Pharmaceuticals Inc. rose in Nasdaq trading after Chief Executive Officer Jack Lief told investors it’s still possible the company’s experimental diet pill will be cleared for sale.

“We believe we have a path forward to obtain approval of lorcaserin,” Lief said today on a conference call.

Arena said on Oct. 23 that it received a letter from the U.S. Food and Drug Administration asking for more data on how well the drug works and risks of tumors seen in rat studies. The San Diego-based company gained 4 cents, or 2.5 percent, to $1.67 at 4 p.m. New York time in Nasdaq Stock Market composite trading. Lorcaserin, Arena’s first product, is licensed by Tokyo-based Eisai Co.

The companies are competing with Mountain View, California-based Vivus Inc. and Orexigen Therapeutics Inc., of San Diego, to introduce the first prescription weight-loss drug in more than a decade. Safety issues spelled the demise of Wyeth’s fen-phen in 1997, Sanofi-Aventis SA’s rimonabant in 2007 and Abbott Laboratories’ Meridia this month.

“If FDA holds to a higher standard on weight-loss pills, we will get better ones,” said Diana Zuckerman, president of the National Research Center for Women & Families, before the announcement.

Cancer link

Lorcaserin was linked to cancers in studies of rats and helped people lose 3 percent more weight than a placebo, short of the recommended 5 percent, according to an FDA staff review released Sept. 14. A panel of doctors and scientists advising the agency voted 9-5 against recommending approval on Sept. 16.

Arena shares rose 12 percent on Oct. 22 after the FDA said it regretted it didn’t ask an animal toxicity expert to serve on the advisory panel. The stock has fallen 53 percent this year.

The FDA in the letter said further studies may be needed to understand the drug’s risks versus benefits should additional data fail to alleviate concerns it may increase the risk of cancer. The agency also asked for results from a study called BLOOM-DM of obese people with diabetes, which Arena expects will be ready within a few weeks.

“We believe Arena will have difficulty getting lorcaserin approved as a monotherapy due to our low confidence in the BLOOM-DM trial,” said Steve Yoo, an analyst at Leerink Swann in New York, in a note to clients today. “We remain skeptical on the likelihood of success given the barely approvable efficacy seen to date with lorcaserin and the history of poor weight loss results in diabetics.”

Meeting With FDA

The company plans to ask the FDA this week to schedule a meeting in the next 30 days to discuss these issues.

“Given we just received the letter on Friday and we haven’t met with the FDA, it’s too early to provide you with much clarity on our plan” of how and when to answer the agency’s questions, Lief said on the conference call today.

Before the advisory panel meeting, Jon Lecroy, an analyst at Hapoalim Securities in New York, had said peak sales of lorcaserin may reach $800 million globally in 2015.

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.

Vivus is scheduled to hear by Oct. 28 the response to its application to sell a diet pill called Qnexa. An advisory panel voted 10-6 against approval because of concerns the drug may cause birth defects and increased heart rate. The pill works better than lorcaserin and Eric Colman, deputy director of the FDA’s Division of Metabolism and Endocrinology Products, said he was surprised by the advisory panel’s vote.

Orexigen and partner Takeda Pharmaceutical Co., of Osaka, Japan, plan to present their diet pill, Contrave, to an advisory panel Dec. 7. The FDA is scheduled to make a decision on the drug by Jan. 31.

To contact the reporter on this story: Catherine Larkin in Washington at clarkin4@bloomberg.net.

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

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