Arena (NASDAQ:ARNA) released their complete response from the FDA over the weekend, regarding the non-approval of their weight loss drug Lorcaserin. And the arguing has already started about just how bad the news is. There are several levels that this process could be tracking on, and we just don't know which one it's on yet.
And the varied regulatory paths that result give you answers to "When will the drug be approved" ranging from "Maybe in six months" through "Maybe in a year" on out to "Maybe in a few years", which at that point shades into "Never". One of the main sticking points is the carcinogenicity data from the animal studies - the FDA is worried, and they want Arena to round up some outside experts to go over the data to address their concerns. Problem is, we don't quite know what that means. It could be anything from "Have some people assure that FDA that everything's actually fine" (the Arena bull position) to "Go run a bunch more long clinical trials" (which is one of the bear positions). I think it's unlikely that the FDA will let the company go through without at least running more rodent studies; I just can't see an outside review of the data doing enough to calm them down. The agency, I believe, is in more of a "Get some people to help you design some good studies" mode.
Matthew Herper's take seems reasonable to me. As he points out, even when companies have gotten a drug through after one of these Complete Response Letters, it's taken at least seven months when the issues didn't involve the clinic. He seems to be taking flak from Arena investors who have loarcaserin penciled in for somewhere around Valentine's Day. But I don't see how that's going to happen, either. Try April Fool's - of some other year.