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Arena Hide-And-Seek

|Includes:Arena Pharmaceuticals, Inc. (ARNA)

Sometimes management of a company has to be a bit coy for business reasons. I understand that. What I do not like to see is when a company plays hide-and-seek with certain things. The pathway on a decision for Belviq in Switzerland is something that I feel the company was being coy about. This makes trusting management more difficult.

In the 10Q filed for Q2 of 2013 Arena stated this about progress in Switzerland:

We intend to seek regulatory approval of BELVIQ in additional territories that are not currently under collaboration. Outside of our collaborations, we have a pending marketing authorization application, or MAA, for regulatory approval of BELVIQ in Switzerland. In February 2013, Swissmedic provided feedback to our MAA in the form of a list of questions with major objections. We responded to the list of questions in writing, and we subsequently received a preliminary determination from Swissmedic that those concerns have not been satisfied. We expect to continue discussions with the intent of addressing Swissmedic's concerns.

In the Q2 conference call the company stated this:

We also reported Swiss agency, Swissmedic communicated concerns in its Day 120 questions that were similar to those raised by the EMA. We have now received the preliminary determination from Swissmedic that the concerns have not been completely satisfied by our Day 120 response. We plan to continue regulatory discussions in order to address the Swissmedic's concerns.

In the 10Q filed for Q3 of 2013 Arena stated this about progress in Switzerland:

We have a pending marketing authorization application, or MAA, for regulatory approval of BELVIQ in Switzerland. In February 2013, Swissmedic provided feedback to our MAA in the form of a list of questions with major objections. We responded to the list of questions in writing, and we subsequently received a preliminary determination from Swissmedic that those concerns have not been satisfied. In collaboration with Eisai, we expect to continue discussions with the intent of addressing Swissmedic's concerns.

In the Q3 Conference Call the company stated:

Our interactions with Swissmedic continue as we pursue regulatory approval of BELVIQ in Switzerland. We will keep you updated on this process as appropriate.

In the 10K filed for the full year of 2013 Arena stated this about the progress in Switzerland:

With respect to Switzerland, Swissmedic provided feedback to our MAA in the form of a list of questions with major objections, which include objections that are similar to those identified with respect to our MAA for the European Union. We responded to the list of questions in writing, and we subsequently received a determination from Swissmedic that those concerns have not yet been satisfied and that our application would not be approved. While we expect to continue to work with Eisai to pursue regulatory approval in Switzerland, BELVIQ may not be approved for marketing in Switzerland when expected or ever.

In the conference call Arena stated this:

Beyond the U.S. market, BELVIQ is currently under regulatory review for marketing approval in Switzerland, Mexico, Canada, Brazil, and South Korea.

In the most recent 10Q for Q1 of 2014 Arena stated this about progress in Switzerland:

We also previously filed an MAA for approval of BELVIQ in Switzerland, and Swissmedic provided us feedback that included major objections that were similar to those identified with respect to our MAA for the European Union and determined not to approve our application. We expect Eisai to potentially submit for regulatory approval in Europe at a later date, but BELVIQ may not be submitted for regulatory approval in Europe when expected or ever.

The company did not even bring Switzerland up in the conference call. Why is it that as an investor I have to play hide and seek with the company on an issue such as this? The company promised to keep investors updated on the progress as appropriate. Was a rejection in Switzerland not an event that investors should be updated about?

The 10K was filed in March of this year. The company spoke to review for marketing approval in Switzerland just two months ago. Now suddenly we learn by digging through the 10Q that the Swiss have rejected Belviq.

I am highly critical of this because it seems like the company is trying to duck the issue and not be forthcoming with information. The announcement of filing for application in Switzerland was seen as strong enough and material enough to generate the filing of an 8K in July of 2012, yet the rejection seems to be hush and swept under the rug of a ton of boiler-plate 10Q language.

Yes, this is a rant. Why do I rant? Because investors deserve better treatment than this.

Disclosure: I am long ARNA.

Stocks: ARNA