Arena Plunges as FDA Panel Says Obesity Drug Risks Outweigh Benefits

|
 |  Includes: ARNA, ESALY
by: The Burrill Report

By Michael Fitzhugh, Marie Daghlian

Arena Pharmaceutical’s (NASDAQ:ARNA) shares plunged nearly 40 percent after a U.S. Food and Drug Administration advisory committee rejected its proposed weight loss drug lorcaserin. The reviewers expressed concern that potential risks of long-term use outweighed its benefit of modest weight loss.

A briefing document issued two days earlier noted that the drug caused cancer in lab rats and succeeded by just “a slim margin” in meeting the FDA’s expectations for weight management. That news spurred a sell-off that drove Arena's shares down 38 percent as investors fretted over how the FDA's Endocrinologic & Metabolic Drugs Advisory Committee would vote. The committee’s recommendation often guides the FDA’s final decision on whether or not to grant marketing approval.

Arena developed lorcaserin to help obese and overweight patients with at least one weight-related co-morbid condition shed pounds and maintain weight loss. Although the drug is similar to fenfluramine, a component in the ill-fated diet pill fen-phen, studies showed it was not linked to heart valve damage.

While different, lorcaserin has been associated with other problems, according to the FDA briefing document. A safety assessment of the drug focused on concern about the development of multiple tumor types in a carcinogenicity study in rats and impairments in attention and memory in some clinical trial participants testing the drug.

In two late-stage trials of the drug, people taking lorcaserin lost an average of 3 percent more weight than those taking a placebo. That fell short of the 5 percent recommended weight loss the agency has suggested. A 10 milligram dose of the drug did, however, “by a slim margin, satisfy the categorical efficacy criterion,” wrote Eric Colman, deputy director of the FDA’s Division of Metabolism and Endocrinology Products.

The advisory committee voted 9-5 against approval, unsure whether tumors in lab rats would mean increased likelihood of tumors in people.

Arena is banking on lorcaserin’s approval. The company granted Japanese pharmaceutical Eisai (OTCPK:ESALY) exclusive U.S. commercialization rights for $50 million in an upfront payment in July. The advisory committee said the available data do not adequately demonstrate that the potential benefits of lorcaserin outweigh the potential risks, when used long-term in a population of overweight and obese individuals to allow marketing approval.

Lorcaserin, which Arena discovered and developed, is intended for weight management, including weight loss and maintenance of weight loss, in patients who are obese or patients who are overweight and have at least one weight-related co-morbid condition. The FDA has said it expects to act on the application for marketing approval by October 22.

Qnexa, another experimental obesity drug, met with disappointment when the Endocrinologic and Metabolic Drugs Advisory Committee met in July to discuss safety concerns that led them to recommend against approval. The FDA is due to decide its fate by October 28.

Other recipients of bad news in the obesity realm this year have included Abbott's (NYSE:ABT) Meridia, which on Monday was linked to increased risks of heart attack and stroke risk, Roche's (OTCQX:RHHBY) Alli and GSK’s Xenical. In May, the latter two orlistat-based medicines, got new labels warning patients about the risks of liver failure or liver death.

More than two thirds of American adults are overweight, leaving many vulnerable to serious medical consequences, such as type 2 diabetes, cardiovascular disease, cancer and depression.