Holding pattern for Arena:
Shares of Arena Pharmaceuticals (NASDAQ:ARNA) have languished of late. The catalyst that will drive the shares higher will be final scheduling by the DEA. The comment period ended on January 18th, 2013, and since then the stock has fallen from over $10 to below $8, with support at the level. A final DEA scheduling could easily propel the shares past the $10 level, as the post-approval period last Summer saw a range between $10 and $12 (in June and July).
Once the waiting is over, Eisai (OTCPK:ESALY) will be able to market the product in the United States, and Arena will be set to receive a $65 million progress payment. Eisai estimates sales to reach $1B in the U.S. by the year 2020. However, the launch has been delayed until the DEA releases their final ruling.
What's an investor to do?
I have done a lot of thinking on the topic of the DEA finalization of Lorcaserin. Keep in mind, I am not a medical expert or trained in the field. I have, however, read prior scheduling responses by the DEA, and understand the format which the responses are given.
Since I am not the type of person to call and badger the DEA every day (and further delay the process), I wondered what I could do to actually help them, and not cause further delays in picking up the phone. While my template took about 1 hour to write, I hope it might serve our government workers, and expedite the process. Today is Day 84 of the review of the comments from the public, roughly twice the average for this stage; perhaps, the DEA is dealing with the 69 comments individually. I don't think they have to do this. They can easily group the comments into areas, and respond as I suggest.
Note: There may be other facts and data to include. This is a template.
"We received 69 comments of which 22 had a dissenting opinion of the proposed Schedule IV scheduling. Given that the substance has qualities the demonstrate drug abuse potential, like Zolpidem (Ambien), we consider that a Schedule V or Unscheduled classification for this drug is not warranted.
We classified the dissenting opinions into claims that stressed these components:
1) The drug has marginal efficacy, and will be used in combination with phentarmine
2) The drug is like LSD, and will be abused in the same manner.
3) The drug is addictive, and patient population (obese people) have a proclivity to addictions.
4) The drug will be used in large quantities to achieve a "high".
5) There are other drugs on the market which serve the patient population, and a waiver should not be granted.
6) That there hasn't been enough time or discussion about the drug
Point 1: Combination use. We disagree. The DEA auspice is to determine a drug's addiction and abuse potential. Using the Fen/Phen data, we determined that this combination was not harmful due to it's addiction or abuse to get "high". The drug was removed from formulary because of its propensity to cause heart attacks and other health issues.
Example: Comment 57 - Anonymous
The sooner you approve this drug the sooner my friends and I can mix generic Phentermine and Lorcascerin (Belviq) together for a new wild ride.
Example: Comment 59 - Anonymous
I am concerned about the potential for Lorcaserin to be used off label in conjuction with phentermine. The committee should consider this possibility in making their determination.
Point 2: LSD-like drug. We disagree. At the prescribed dose (10 mg, BID), Lorcaserin causes hallucinations and other mind-altered states which are similar to Zolpidem, a Schedule IV drug. This was determined by the FDA and HHS in their studies, and we concur.
Example: Comment 67 - "SP"
Patients need more physicians who help them address their weight challenges and related co-morbidities. Patients and physicians need medications to do this.
However, a drug that is an agonist to 5-hydroxytryptamine (5-HT) receptors, particularly the 5-HT2A and 5-HT2C subtypes are a problem because they are known to be hallucinogenic like LSD (lysergic acid diethylamide).
This is a known and serious adverse effect. Class IV scheduling is not adequate to enable physicians and patients to properly assess the risk. Class III or higher is needed.
Please strongly consider a different classification that protects the public from this known hallucinogenic agent.
Point 3: Drug addiction proclivity of patient population. We disagree. The patient population (obese) are administered the drug for the purpose of losing weight. In studies, the population used the drug appropriately. For that matter, LSD is not shown to be addictive.
Example: Comment 51 - Anonymous
Dear DEA, My understanding regarding Belviq is that dosage abuse of this new drug can turn on serotonin switches responsible for the effects of hallucinogens (such as LSD) and addictive drugs of abuse. As a mother, I am well aware of the young female obsession with "thin at any cost" brought on by Madison Avenue dream peddlers. I am extremely worried this mindset combined with the recent epidemic of prescription pill abuse by young adults put my daughter at risk. I strongly urge you to enhance the scheduling of this new drug and thereby perform your responsibility to protect the American public.
Point 4: Drug will be used in large quantities to achieve "high". We disagree. While crushing, snorting and taking the drug in large quantities is a risk, there is limited concern that this practice will be widespread. The cost of the drug, at retail, will be substantially high. Also, the controls in place for a Schedule IV drug limit the possibility of mass quantities being available for street sale.
Example: Comment 54 - Anonymous
Drug dealers can't wait to get their hands on this drug!
Point 5: Waiver should not be granted. We disagree. With prior drugs that have requested expedited final scheduling, there were also other drugs which were meant to serve the patient population. The current applicant's drug Lorcaserin will meet a serious unmet need, as there are limited options of approved FDA drugs on the market.
Eisai, Inc. did not adequately substantiate or support a rationale for granting this request in their letter to the DEA, in my opinion-and it should be noted that their letter did not a) indicate how they would ensure appropriate labeling, packaging and sales representative training regarding the Final Rule for lorcaserin, or b) make mention of the fact that there are additional FDA- approved medications which are currently readily available to physicians for short-term and chronic weight management (including phentermine, orlistat (Xenical/ Alli) and Qsymia, which became available on September 17, 2012). Eisai's request to the DEA appears to be commercially motivated, in my opinion, could be potentially injurious to the public if granted, and I feel it should therefore be carefully scrutinized.
Point 6: Not enough time to adequately review. We disagree. The FDA studied the drug diversion potential during the drug approval process, and HHS spent almost six months (June 22nd to December 18th) in determining the proposed schedule. Our mandate is to have a 30-day comment period. We feel the scheduling is appropriate and has been studied at length.
Example: Comment 65 - Anonymous
I would like to express my concern for the scheduling of lorcaserin as only a scheduled IV agent. It is well understood that slightly higher than indicated doses of lorcaserin are able to produce drug seeking and drug abusing behaviors. This is a product that has limited value in its approved indication. As shown in its approved labeling, patients after two years of treatment have lost minimal weight. For a drug that is indicated to be taken chronically,the potential for abuse is large with the benefit to patient care being very small if non-existent.I request that the DEA hold a formal hearing with relevant experts prior to finalizing the scheduling for this agent. This discussion did not take place during either of the two advisory committee meetings leading to approval and outside expert opinion is needed.
Example: Comment 20 - Anonymous
You have not given the American public sufficient time to read, digest or respond to this proposed rule as required by the federal Administrative Procedures Act. I request that you extend the comment deadline by 60 days
If one views the examples provided, there was one striking similarity. Only 3 of the 22 negative comments provided an actual name, seven provided initials, and most were anonymous. Contrast that with 41 of 47 which were signed with a real name that were of a positive variety.
You can find all of the comments at the Federal Register site.
In an appendix, I provide snippets from each comment, and the determination if they were positive or negative.
The "voice of the people" providing the negative comments also chose to selectively take the comment from Dr. Robert Mansbach out of context. While concerned with the schedule IV proposal, his conclusion was in support of Schedule IV. Comment 32
I am a substance researcher and consultant writing in support of the scheduling of lorcaserin based on the recent scientific and medical evaluation conducted by the Food and Drug Administration (FDA)
Still, the anonymous doctor (#64 - referenced above) and another commenter (#66 - anonymous, with word doc properties showing "Wesley Day" as the author) borrowed heavily from Dr. Mansbach's paper, yet came to different conclusions, requesting Schedule II. Anonymous wrote:
From a benefit risk perspective, Belviq produces modest weight loss at best and can also cause cognitive changes, euphoria, and hallucinatory experiences at and above the recommended dose. Based on these findings, Belviq should be placed into Schedule II of the CSA, which would prevent patients from receiving refills.
One final note: Of the 22, there was actually what was almost a direct copy of another. Authored by persons with two different sets of initials, one following the other. I would hope the DEA would consider this as one comment.
Comment 44 by N, J
With such modest results, weight loss advocates have already suggested that lorcaserin could be combined with another drug (like phentermine) to produce even greater weight loss results, according to the New York Times:Dr. Ed J. Hendricks, an obesity specialist in Sacramento, said that he and other doctors will try prescribing Belviq in combination with phentermine, to essentially reconstitute the once popular fen-phen combination. "Once that word gets out that it works the same way, you are going to have a huge demand," said Dr. Hendricks, who was on the advisory committee that voted in favor of approving Belviq.
And yet, during the 2010 FDA review, the risks of combination also contributed to its initial rejection:
But several panelists pointed out that, if approved, lorcaserin might be used in combination with another weight-loss drug, phentermine.
The possibility of abuse will be reviewed by the Drug Enforcement Agency over the next four to six months, which will determine its classification and control.
Comment 45 by T, N
With such modest results, weight loss advocates have already suggested that lorcaserin could be combined with another drug (like phentermine) to produce even greater weight loss results, according to the New York Times:Dr. Ed J. Hendricks, an obesity specialist in Sacramento, said that he and other doctors might try prescribing Belviq in combination with phentermine, to essentially reconstitute the once popular fen-phen combination. "Once that word gets out that it works the same way, you are going to have a huge demand," said Dr. Hendricks, who was on the advisory committee that voted in favor of approving Belviq.
And yet, during the 2010 FDA review, the risks of combination also contributed to its initial rejection:
But several panelists pointed out that, if approved, lorcaserin might be used in combination with another weight-loss drug, phentermine, which has been associated with drug-induced valvular heart disease.
The possibility of abuse will be reviewed by the Drug Enforcement Agency over the next four to six months, which will determine its classification and control.
In the past, people have allowed researchers to harness their PC's power to do research on complicated calculations. Instead of using my time and mind-power on message boards, I decided to aid the DEA. I hope this helps.
Look for shares to rise, once scheduling is finalized, as there will be renewed interest in the shares. Many holders have been seeking stocks which are not in a holding pattern, with no apparent end in sight. Also, the European Medical Agency is expected to rule on the drug sometime in the 1st half 2013, which could be the catalyst to send the shares into and past the Summer 2012 level of $10.00. Patient investors have significant upside, with risks of EU rejection as downside. Target $11.
Appendix: All comments, snippet form
|DEA-2012-0007-0003||Dear DEA: Our country is faced with an obesity epidemic currently in full swing with limited means for physicians to fight this epidemic. Delay is costing lives and billions in...||Dedvukaj, Joseph||Pos||Yes|
|DEA-2012-0007-0004||I agree with the DEA and FDA assessment that Lorcaserin should be a schedule IV substance. I would like to press upon this agency that the substance review period has already...||Caruso, Kevin||Pos||Yes|
|DEA-2012-0007-0005||Our country is facing an obesity epidemic. As a physician I see the repercussions on a daily basis, larger and larger patients with increasing comorbidities, diabetes...||Viola, John||Pos||Yes|
|DEA-2012-0007-0006||See attached file(s)||Taisey, Mark||Pos||Yes|
|DEA-2012-0007-0008||We have an urgent and worsening epidemic of catastrophic consequence. When the house is on fire you don't wait 30 days to put out the fire. DEA has taken six months to review...||GANJAVI, REZA||Pos||Yes|
|DEA-2012-0007-0009||Belviq is a novel molecule and drug that is essential in the fight against Obesity. Obesity is one of the main component in Metabolic Syndrome. I agree with Belviq being at least...||Morgan, Courtney||Pos||Yes|
|DEA-2012-0007-0010||DEA, get yourself out of the way so that this most important drug can begin its good work.. Lets get the show on the road!!||Brennan, Joseph||Pos||Yes|
|DEA-2012-0007-0011||Dear DEA staff. I ask that you waive the final 30 day hold. I pray each day that Belviq will be available soon. My father is an obese diabetic who worked a lifetime laboring...||C., Michael||Pos||Yes|
|DEA-2012-0007-0012||I also urge the DEA to expedite this process and allow this much needed novel and effective obesity treatment to come to market urgently. As a mental health counselor, I know of...||McDonald, M.A., LMHC, S. John||Pos||Yes|
|DEA-2012-0007-0013||Please waive any future waiting periods, as this drug needs to be prescribed right away to help my patients.||Aaron, Mark||Pos||Yes|
|DEA-2012-0007-0014||Obesity is a serious and potentially life-threatening condition that may not be adequately treated with currently available medicines. While one other drug, "Qsymia" (phentermine...||Hough, James||Pos||Yes|
|DEA-2012-0007-0015||Based on the facts from multiple drug studies concerning Lorcaserin, it should be clear that Lorcaserin should be a non-controlled substance and available for immediate sale to the...||Eckers, Howard||Pos||Yes|
|DEA-2012-0007-0016||Support you in your final Class IV designation. Thank you for all you do in the DEA.||T., R.||Pos||Initials|
|DEA-2012-0007-0017||The research demonstrated efficacy, a very favorable tolerance profile, and not only low potential for abuse, but positive advantage for smoking cessation, from Lorcaserin...||Sapire, Dennis||Pos||Yes|
|DEA-2012-0007-0018||Many people struggled with weight control and I am excited about having another option. Lorcaserin appears safe and effective to treat obesity. I urge the DEA to finalize the C4...||arnold, leslie||Pos||Yes|
|DEA-2012-0007-0019||A major part of the problem with American diets is the prevalence and ingestion of sugars and starches... specifically wheat and corn... which convert into sugar [glucose]. There...||Hall, Bruce||Pos||Yes|
|DEA-2012-0007-0020||You have not given the American public sufficient time to read, digest or respond to this proposed rule as required by the federal Administrative Procedures Act. I request that you...||Neg||No|
|DEA-2012-0007-0021||The Drug Enforcement Administration is recommending a Schedule IV classification for lorcaserin, confirming the Food & Drug Administration's recommendation. This process took six...||Murphy, John||Pos||Yes|
|DEA-2012-0007-0022||Please approve this drug ASAP, you already took long time to publish it in the federal register. We need it as it has no side effects.||Dave, Satyendra||Pos||Yes|
|DEA-2012-0007-0023||Obesity in America did not exist to the extent it does now, because most people are not moving around like they used to. The computer is the reason. The so called "obesity...||Tzilvelis, Jane||Pos||Yes|
|DEA-2012-0007-0024||This process took six months - time the drug could have been available to begin treating the obesity epidemic. I personally know many people who desparately need a solution to...||Kistler, David||Pos||Yes|
|DEA-2012-0007-0025||The Drug Enforcement Administration is recommending a Schedule IV classification for lorcaserin, confirming the Food & Drug Administration's recommendation. This process took six...||Danford, Thomas||Pos||Yes|
|DEA-2012-0007-0026||It seems to me our nation is suffering from an obesity epidemic. Arena Pharmaceuticals new FDA approved treatment; Belviq is the first new, novel effective treatment to come along...||Lucy, Charles||Pos||Yes|
|DEA-2012-0007-0027||I support the adoption of the Proposed Rule. It is reasonably foreseeable that Lorcaserin will help many millions of people. The extent to which a small number of people may abuse...||Balopole, Robert||Pos||Yes|
|DEA-2012-0007-0028||I'm not sure what value public comment is on a new single molecule that the public can have no possible experience with. The science behind this medication is well documented and...||trzecki, ken||Pos||Yes|
|DEA-2012-0007-0029||This country has waited a long time for a safe and effective weight control agent. The additional benefits that seem to be present with Belviq, besides merely weight loss, make it...||Cunningham, Bill||Pos||Yes|
|DEA-2012-0007-0030||It has taken over 6 mths for the DEA to review Belviq.In the mean time thousand have died ,and are dying who could have been helped with this new novel drug from Arena..I'm sure...||Davis, Mark||Pos||Yes|
|DEA-2012-0007-0031||The approval of Belviq to help people with obesity lose weight is the final chapter in the 1970's story that began with the FDA decision to allow the use of high fructose corn...||Taylor, Roy||Pos||Yes|
|DEA-2012-0007-0032||See attached file(s)||Mansbach, Robert||Pos||Yes|
|DEA-2012-0007-0033||I took Qsymia and had some difficult side effects including a severe spike in anxiety, inability to focus my attention, and substantial sleep problems. These issues proved to be...||Pos||No|
|DEA-2012-0007-0034||"The Drug Enforcement Administration is recommending a Schedule IV classification for lorcaserin, confirming the Food & Drug Administration's recommendation. "This process took...||Urban, Joel||Pos||Yes|
|DEA-2012-0007-0035||Dear DEA Staff, This is with utmost urgency I request that Lorcaserin be made available for prescription as soon as possible so that countless people with obesity problems and...||Bohara, Binita||Pos||Yes|
|DEA-2012-0007-0036||As a physician practicing emergency medicine I see daily the impact of the obesity epidemic in the US and throughout the world. As an investor who has followed the pre-clinical and...||Dillon MD MS FACEP, Michael||Pos||Yes|
|DEA-2012-0007-0037||This has to be a new record for the DEA. Six months to classify a drug, glad to see my tax money so efficiently at work. Then we wonder why we're trillions in deficit. Please make...||Singh, Michael||Pos||Yes|
|DEA-2012-0007-0038||Novel means new. New means no long term data. There is no way a new drug that barely beat the results of a placebo should be fast tracked by the DEA. Additionally, this drug should...||Frankl, Robert||Neg||Yes|
|DEA-2012-0007-0039||Dear DEA In reviewing the comments submitted please note that there is an interest by some hedge fund to disparage lorcaserin because they are facing a huge loss due to fighting...||Ganjavi, Reza||Pos||Yes|
|DEA-2012-0007-0040||Dear DEA, This is a no brainer. Please, allow Belviq to be marketed as a schedule IV drug. Obesity is a pandemic disease, and requires all the necessary tools to fight it. A...||LeBlanc, Robert||Pos||Yes|
|DEA-2012-0007-0041||I am a busy internist in Tucson, Arizona and I am a big fan of Belviq (lorcaserin). Efficacy is good with 8% weight loss in a year on completers, 12% weight loss in a year in...||vig, steven||Pos||Yes|
|DEA-2012-0007-0042||If there is one thing I'm sure of, the DEA will act at the last minute of the last day...on Belviq...The FDA and now the DEA, has killed more Americans than any Terrorist could...||Carter, Roger||Pos||Yes|
|DEA-2012-0007-0043||NewsRx - off news wire January 13, 2013 "The latest Weight Loss Craze...Combo Pilling" Ever wonder how Hollywood Starlets get so thin, so fast? Majectic Media TM, a company...||M, T||Pos||Initials|
|DEA-2012-0007-0044||With such modest results, weight loss advocates have already suggested that lorcaserin could be combined with another drug (like phentermine) to produce even greater weight loss...||N, J||Neg||Initials|
|DEA-2012-0007-0045||With such modest results, weight loss advocates have already suggested that lorcaserin could be combined with another drug (like phentermine) to produce even greater weight loss...||T, N||Neg||Initials|
|DEA-2012-0007-0046||See attached file(s)||Nadglowski, joe||Pos||Yes|
|DEA-2012-0007-0047||Dear Sirs, I am a Nurse Practitioner in a university student health clinic. A significant issue we encounter on a daily basis is prescription drug abuse and students seeking it in...||Neg||No|
|DEA-2012-0007-0048||The FDA has spoken and approved this drug. It even told the DEA which category the drug should be placed in. Why did it take so long for the bureaucrats at DEA to classify this...||Marcinkiewicz, Michael||Pos||Yes|
|DEA-2012-0007-0049||There is no way lorcaserin should be approved absent DEA Schedule IV protocol. The reality is the drug is derived from a class of drugs that have addictive tendencies. More...||Neg||No|
|DEA-2012-0007-0050||Schedule IV should absolutely be mandated for lorcaserin. Lorcaserin is dervied from a class of drugs that have addictive tendencies. More importantly, the company is advocating...||Neg||No|
|DEA-2012-0007-0051||Dear DEA, My understanding regarding Belviq is that dosage abuse of this new drug can turn on serotonin switches responsible for the effects of hallucinogens (such as LSD) and...||Lupone, Loraine||Neg||Yes|
|DEA-2012-0007-0052||The likelihood of a widely available and promoted combination of Phentermine and Lorcascerin(Belviq) is a concerning prospect. Arena has made numerous public comments regarding...||Neg||No|
|DEA-2012-0007-0053||It's about time. Why would this process take so long? This is not the approval process. Are all novel drugs hindered this long to reach the market? I'd like to see a study on...||Margaret||Pos||Yes|
|DEA-2012-0007-0054||Drug dealers can't wait to get their hands on this drug!||Neg||No|
|DEA-2012-0007-0055||See attached transcript from Arena Pharmaceuticals CEO at the JPMorgan Global Healthcare Conference (January 9, 2013). This fits in line with other publicly stated comments from...||Neg||No|
|DEA-2012-0007-0056||This drug with such modest results must require strict REMS with long term trials to demonstrate that the benefits do indeed outweigh significant risks. How can the DEA fast track...||D, D||Neg||Initials|
|DEA-2012-0007-0057||The sooner you approve this drug the sooner my friends and I can mix generic Phentermine and Lorcascerin (Belviq) together for a new wild ride.||Neg||No|
|DEA-2012-0007-0058||I am a little worried about this drug from a drug abuse perspective. We know that a lot of overweight/obese people are on other drugs or may have health conditions. Do we know...||VLC||Neg||Initials|
|DEA-2012-0007-0059||I am concerned about the potential for Lorcaserin to be used off label in conjuction with phentermine. The committee should consider this possibility in making their determination.||K, Alex||Neg||Initials|
|DEA-2012-0007-0060||When it comes to a regulatory decision on a promising new medicine for treating obesity, which affects two thirds of the adult US population, the FDA and the DEA need to ask the...||Neg||No|
|DEA-2012-0007-0061||I think you are going off the deep end on this. It's a diet drug. Get over it.||Pos||No|
|DEA-2012-0007-0062||Belviq has the potential to mediate hallucinogenic activity by the same mechanism as agents such as LSD, mescaline, and psilocybin. Belviq is a serotonergic compound that has...||Neg||No|
|DEA-2012-0007-0063||Dear Sir/Madam, I would like to respectfully submit for your consideration my thoughts regarding the proposed scheduling procedure for the recently approved anti-obesity drug...||Whitney, Robert||Neg||Yes|
|DEA-2012-0007-0064||See attached file(s) Please note: This comment was originally sent via USPS Express Mail 1/14/13, and included full copies of all references. I have not been able to confirm...||Neg||No|
|DEA-2012-0007-0065||I would like to express my concern for the scheduling of lorcaserin as only a scheduled IV agent. It is well understood that slightly higher than indicated doses of lorcaserin are...||R||Neg||Initials|
|DEA-2012-0007-0066||Please see the attached document outlining concerns regarding proposed scheduling for Belviqu.||Neg||No|
|DEA-2012-0007-0067||LSD. Lorcaserin. Patients need more physicians who help them address their weight challenges and related co-morbidities. Patients and physicians need medications to do this...||SP||Neg||Initials|
|DEA-2012-0007-0068||This comment is in response to Docket No. DEA-369. This document is in reference to the classification of Lorcaserin as a Class IV drug. After reading the proposed rule twice and...||Taxpayer, Disgusted||Pos||No|
|DEA-2012-0007-0069||Obesity is a major public health issue in the in the US and effective therapies are sorely needed. As a society, however, we still must balance benefit with safety. As a Pharmacist...||RK||Pos||Initials|
|DEA-2012-0007-0070||Dear DEA, after 6 months of review, I hope DEA does the right thing and expedite the Belviq to market. FDA recommended schedule IV with requirements of post-approval studies along...||Thai, Tony||Pos||Yes|
|DEA-2012-0007-0071||I know at least one hedge fund who was trying to derail the FDA approval of lorcaserin simply because they had made a bad bet and had hoped to enforce their version of truth vs...||Ganjavi, Reza||Pos||Yes|
|DEA-2012-0007-0072||Heads up DEA: Ask yourself why these so called doctors who are asking you to not grant the waver of wait period that Eisai requested, and who ask you to make lorcaserin schedule...||Ganjavi, Reza||Pos||Yes|
Disclosure: I am long ARNA. I have no position in ESALY or makers of other obesity drugs. 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.