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I have extensive knowledge on drug discovery, also I am interested in fundamental analysis of biotech/pharma stocks. See Seeking Alpha's policy on anonymous authors: http://seekingalpha.com/article/69847-seeking-alpha-policy-on-anonymous-authorship
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  • Up, Down, Up. Is ARNA a Home Run or Not?
    A very nice article from Brian Orell at fool.com, well written and right on point:
    www.fool.com/investing/high-growth/2009/...

    Shares of Arena Pharmaceuticals (Nasdaq: ARNA) have been on a roller coaster over the past 24 hours. It rose by 38% after hours on word that the company would release data for its obesity drug, lorcaserin, today. Then it opened down 10% after the data was released only to rebound and climb by 20% after management had its say.

    That's the craziness of biotech for you.

    I'm really not sure what management said that got investors so excited; the data is lackluster at best. Lorcaserin might be strong enough to get approved, but it still pales in comparison to efficacy data released by VIVUS (Nasdaq: VVUS) and Orexigen Therapeutics (Nasdaq: OREX).

    For instance, VIVUS' Qnexa resulted in weight loss of 11.0% and 10.4%, beating placebo by about 9 percentage points in two recently completed trials. Lorcaserin, on the other hand, resulted in a 5.9% reduction in body weight, a mere 3 or 4 percentage points better than placebo, depending on which patient group you look at. Comparing data across trials can be deceptive at best, but in this case I think we can call a qualitative winner.

    Sure, the drug is safe. It doesn't seem to have the heart problems that plagued Wyeth's (NYSE: WYE) fen-phen or the psychiatric problems that plagued drugs from sanofi-aventis (NYSE: SNY), Pfizer (NYSE: PFE), and Merck (NYSE: MRK). And management wants to argue that it'll be a first-line treatment for that reason alone.

    But I have a hard time seeing doctors rushing to get their patients on lorcaserin when there may be other drugs on the market by then that help people shed so many more pounds. If doctors are looking for a low-risk solution, they might be better off prescribing diet and exercise changes than trying to eke out an additional 6- to 8-pound loss for a 200-pound person on lorcaserin.

    There may be some smaller role for lorcaserin on the obesity market, just as there has been for other less-than-stellar diet drugs before it, but if you're looking for a blockbuster homerun, I'm not sure you'll find it in this Arena.


    Sep 20 9:07 PM | Link | Comment!
  • J. P.Morgan latest analyst report on ARNA
    J. P.Morgan latest analyst report on ARNA:
    This morning, Arena (NASDAQ:ARNA) released what we consider to be disappointing Phase 3 results from the BLOSSOM obesity trial. Lorcaserin’s efficacy was once again underwhelming – even worse than the prior BLOOM trial – and, indeed, some may debate whether this even satisfies FDA requirements for approvability. Either way, we're concerned with any obesity drug having to argue semantics from an efficacy standpoint with the FDA. On the positive side, safety was reassuring and thus makes lorcaserin potentially amenable to combination use. However, no such trials have been conducted (or are even planned), which we continue to find troublesome. Remain Neutral on ARNA.
    BLOSSOM background. Recall that BLOSSOM is a Ph 3 trial evaluating lorcaserin (10mg QD and 10mg BID) for 52 wks in 4,008 pts (BMI 35.9, baseline weight 220lbs), including those with valvulopathy.

    Pbo-adjusted weight loss even worse than BLOOM. BLOSSOM results showed that lorcaserin achieved pbo-adjusted weight loss of an anemic 3.1% and 2% in the BID and QD arms, respectively (pbo=2.8%). These results are even weaker than BLOOM, where lorcaserin showed disappointing 3.6% pbo-adjusted wt loss. For comparison, we note that Qnexa recently showed pbo-adjusted wt loss of 8.6-9.4%, and Contrave has shown 4.8-5.2%.
    Lorcaserin may satisfy categorical hurdle. The proportion of pts losing 5% or more of their body weight in the BID and pbo arms of BLOSSOM was 47.2% and 25%, respectively (QD=40.2%). While this may be viewed by FDA as meeting the guidance requirements, it still remains an open question whether the magnitude of weight loss benefit will be viewed as clinically and commercially significant. Recall that in BLOOM, lorcaserin met the categorical hurdle (48% vs. 20%). By way of comparison, Qnexa (EQUIP 45% vs 17% pbo and CONQUER 62% vs 21% pbo) and Contrave (45-56% vs. 16-19% pbo) handily cleared this hurdle.

    Recap of FDA guidance. As a reminder, the current FDA draft guidelines for obesity drugs read “... A product can be considered effective for weight management if after 1 year of treatment either of the following occurs: 1) The difference in mean weight loss between the active-product and placebo-treated groups is at least 5% and the difference is statistically significant, or 2) The proportion of subjects who lose greater than or equal to 5% of baseline body weight in the active-product group is at least 35%, is approximately double the proportion in the placebo-treated group, and the difference between groups is statistically significant.” Clearly, lorcaserin does not meet the first requirement, and is right on the cusp of the second.

    Important secondary endpoints remain a question mark. Little information was provided in the press release regarding lorcaserin’s effect on important secondary endpoints such as blood pressure, cholesterol, blood glucose, etc. All that was said is there was either a significant improvement or “strongly favorable trends” on these measures. In our view, an obesity drug’s impact on these key risk factors is critical in forming the overall risk/benefit profile for a drug and potentially securing reimbursement. We look for incremental information on the conference call.

    Safety is the lone bright spot, and makes lorcaserin amenable to combination use. As with BLOOM, there were no surprising safety signals in BLOSSOM. Overall, more lorcaserin-treated pts completed the trial than pbo (57% BID, 59% QD, 52% pbo). Of note, discontinuations for adverse events were slightly higher with lorcaserin (7.2% BID, 6.2% QD, 4.6% pbo). Importantly, no difference in the rates of valvulopathy were seen (2% BID, 1.4% QD, 2% pbo). Indeed, the company noted that an integrated analysis of the ECHO data ruled out the risk of valvulopathy. Recall that FDA required the company to rule out a ≥1.5 fold relative risk of valvulopathy in pooled BLOOM and BLOSSOM data.
    Sep 18 9:27 PM | Link | Comment!
  • Vivus still has good upside potential
    In the past few days, obesity drug Qnexa being developed by Vivus, Inc. (NASDAQ:VVUS) drew quite some attention from mass media. The recent Qnexa Phase III data showed both high efficacy and good safety. There is an important aspect here, and that is that it puts two other drug companies in the hot seat. Orexigen Therapeutics Inc. (NASDAQ: OREX) met its weight loss targets in late stage studies and it has previously given an early-2010 for when it seeks FDA approval.  Arena Pharmaceuticals Inc. (NASDAQ: ARNA) is also developing a weight loss treatment which will release phase III data soon. Vivus share price still has good upside potential, several incoming catalysts are now on the horizon :

    1. Four conference presentations in September.
    2. Arena will release phase III data for its obesity drug by the end of September.
    3. Rumor of partnership/buyout.
    4. Institutes are loading now, and  the daytraders will eventually get out.
    5. More analysts upgrade is almost a sure thing.
    6. Another drug Vivus is developing-Avanafil should get its phase III data out this fall. Any good news out of that trial will increase the value of VVUS.

    A recent study carried out in part by the U.S. Centers for Disease Control and Prevention found that obesity-related diseases account for nearly 10 percent of all medical spending in the United States, or an estimated $147 billion a year. A new diet drug in the U.S. will have a market that might be worth $10 billion annually for a safe therapy that helps patients lose 10 percent of their weight in a year, said Needham & Co. Analyst Mark Monane. Global obesity levels, linked to rising rates of diabetes and heart disease, will swell 75 percent to 700 million people by 2015, according to the World Health Organization.

    The studies included more than 3,750 patients taking a mix of three doses and placebo. Patients taking Qnexa, on average, reduced their weight by up to 14.7 percent in one trial, while the drug also prompted improvement in blood pressure and diabetes risk factors.

    A second year-long trial of 2,487 obese patients with concomitant conditions such as diabetes, showed those who took Qnexa had an average weight loss of 30 pounds, or 13.2 percent of body weight, compared with a percentage weight loss of 2.4 percent for the placebo group.

    Patients who took a lower dose of the drug lost 24 pounds, or 10.5 percent of their body weight.

    In both studies, patients taking placebo lost less than 3 percent of their weight.

    Vivus said the results support the company's plan to ask for Food and Drug Administration approval by the end of 2009. That could put the company's application ahead of a key competitor, Orexigen Therapeutics Inc.'s Contrave.

    Side effects in the Qnexa trials is very mild,which included dry mouth, tingling, constipation, altered taste and insomnia. Reported drug-related instances of depression and depressed mood adverse events of a moderate to severe nature were less than 2 percent and were similar among patients in the Qnexa and placebo groups, while monthly assessments showed no signal for suicidal risk.

    JMP Securities has estimated that Qnexa, for which Vivus has said it would seek U.S. Regulatory approval later this year, could have worldwide sales of $1.5 billion in 2015.

    The results are among the strongest ever seen in an obesity drug trial and came without the serious side effects seen in other obesity products such as Acomplia, an obesity drug developed by Sanofi-Aventis SA which never reached the U.S. market because it caused mental problems.

    The results will form the basis of a marketing application with U.S. regulators later this year.

    Analysts expect the drug to be a "blockbuster," meaning it will generate annual sales of more than $1 billion.

    "The weight loss is much more impressive than that seen with other drugs now on the market or in development," said Adam Cutler, an analyst at Canaccord Adams. "I think it's safe to call this the best."

    The marketed diet drugs Xenical and Meridia cut body weight by 4 percent to 5 percent, while products being developed by Arena Pharmaceuticals Inc (ARNA) and Orexigen Therapeutics Inc (OREX) produce only moderately "high-single digit" weight loss, he said.

    "I think this is a game-changer," said Leland Wilson, the company's chief executive, in an interview. "This will change the way people look at obesity, the way payers pay for it, and we think it will have a major impact on health."

    Positing a hypothetical example of what patients might expect from Qnexa, Vivus said a typical 51-year-old female weighing 250 pounds would lose 37 pounds, reduce her blood pressure and risk for diabetes, increase good cholesterol 21 percent and reduce bad cholesterol 18 percent.

    In clinical terms, that means the average risk of having a major heart event within the next 10 years drops from 27 percent to 7 percent, Vivus said.

    Wilson said the company plans to begin immediate partnership discussions with big pharmaceuticals companies and given the huge potential patient population -- more than a third of Americans are obese -- he expects to negotiate a "state of the art deal."

    "We've had high interest from pharmaceutical companies, but we were all waiting for these results," he said. "Now serious negotiations can begin." Wilson is optimistic that Qnexa's strong data will capture the industry's attention. Although Vivus is looking for a sales partner, larger companies may be more interested in buying the company outright, a situation that is familiar to Wilson.
     

    Disclosure: Long VVUS from mid April, 2009.
    Sep 16 7:25 PM | Link | Comment!
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