Arena Pharmaceuticals (NASDAQ:ARNA) has received the highly anticipated DEA scheduling of its anti-obesity drug Belviq. The proposed scheduling was published in the Federal Register today. With proposed DEA scheduling in hand Arena is a hop, skip, and jump away from bringing its drug to the market. Once on the market Arena's Belviq will be one of only 2 anti-obesity prescription drugs on the market. The other is Vivus's (NASDAQ:VVUS) Qsymia which launched in late September. Investors can now anticipate a launch of Belviq in Q1 of 2013.
SUMMARY: The Drug Enforcement Administration (NYSE:DEA) proposes placing the substance lorcaserin (Belviq), including its salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible, into Schedule IV of the Controlled Substances Act (CSA). This proposed action is based on a recommendation from the Assistant Secretary for Health of the Department of Health and Human Services (HHS) and on an evaluation of all other relevant data by DEA. If finalized, this action would impose the regulatory controls and criminal sanctions of Schedule IV on the manufacture, distribution, dispensing, importation, exportation, and possession of lorcaserin and products containing lorcaserin.
DATES: DEA will permit interested persons to file written comments on this proposal pursuant to 21 CFR 1308.43(g). Electronic comments must be submitted and written comments must be postmarked on or before [INSERT DATE 30 DAYS AFTER PUBLICATION IN THE FEDERAL REGISTER]. Commenters should be aware that the electronic Federal Docket Management System will not accept comments after midnight Eastern Time on the last day of the comment period.
A DEA schedule of IV was anticipated by many and that is exactly what has been proposed. The DEA schedules drugs within 5 categories according to the potential for abuse and other factors. Schedule I is the most restrictive and Schedule V the least restrictive.
Schedule I Controlled Substances
Substances in this schedule have no currently accepted medical use in the United States, a lack of accepted safety for use under medical supervision, and a high potential for abuse.
Some examples of substances listed in Schedule I are: heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), peyote, methaqualone, and 3,4-methylenedioxymethamphetamine ("Ecstasy").
Schedule II Controlled Substances
Substances in this schedule have a high potential for abuse which may lead to severe psychological or physical dependence.
Examples of Schedule II narcotics include: hydromorphone (Dilaudid®), methadone (Dolophine®), meperidine (Demerol®), oxycodone (OxyContin®, Percocet®), and fentanyl (Sublimaze®, Duragesic®). Other Schedule II narcotics include: morphine, opium, and codeine.
Examples of Schedule II stimulants include: amphetamine (Dexedrine®, Adderall®), methamphetamine (Desoxyn®), and methylphenidate (Ritalin®).
Other Schedule II substances include: amobarbital, glutethimide, and pentobarbital.
Schedule III Controlled Substances
Substances in this schedule have a potential for abuse less than substances in Schedules I or II and abuse may lead to moderate or low physical dependence or high psychological dependence.
Examples of Schedule III narcotics include: combination products containing less than 15 milligrams of hydrocodone per dosage unit (Vicodin®), products containing not more than 90 milligrams of codeine per dosage unit (Tylenol with Codeine®), and buprenorphine (Suboxone®).
Examples of Schedule III non-narcotics include: benzphetamine (Didrex®), phendimetrazine, ketamine, and anabolic steroids such as Depo®-Testosterone.
Schedule IV Controlled Substances
Substances in this schedule have a low potential for abuse relative to substances in Schedule III.
Examples of Schedule IV substances include: alprazolam (Xanax®), carisoprodol (Soma®), clonazepam (Klonopin®), clorazepate (Tranxene®), diazepam (Valium®), lorazepam (Ativan®), midazolam (Versed®), temazepam (Restoril®), and triazolam (Halcion®).
Schedule V Controlled Substances
Substances in this schedule have a low potential for abuse relative to substances listed in Schedule IV and consist primarily of preparations containing limited quantities of certain narcotics.
Examples of Schedule V substances include: cough preparations containing not more than 200 milligrams of codeine per 100 milliliters or per 100 grams (Robitussin AC®, Phenergan with Codeine®), and ezogabine.
The schedule IV proposed for Belviq is positive and indicative of a low propensity for abuse. Over the past several months there has been much debate as to what schedule Belviq would obtain with some arguing that schedule III was a distinct possibility. As it turns out the DEA appears to agree with the FDA that a schedule assignment of IV is warranted.
The big news here is not so much the positive in getting the proposed Schedule IV status, but the fact that with DEA scheduling now essentially wrapped up the product can go to the market as soon as the comment and response period is complete. That should take about 75 days. The DEA has a 30 day comment period and a 45 day response period at which time finalized scheduling is released. There is typically another 30 day hold, but that can be waived by the DEA.
At this point the DEA scheduling news does not seem to be widely reported. When this news does begin to cross the wires we could see a pop in the share price of ARNA because of not only positive scheduling, but the now imminent launch of the product.
If the 30 day hold is waived we would look at a launch of Belviq about March 3rd of 2013, in time for some early results in Q1. The 30 day comment period would run through January 17th, and the 45 day response period through March 3rd.
Disclosure: I am long ARNA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I have no position in VVUS