Arena's New Obesity Drug: Safe, But Not Too Efficacious

Includes: ARNA, OREX, VVUS
by: Ruthanne Williams Roussel

After all that buildup, Arena's (NASDAQ:ARNA) long-awaited two-year BLOOM trial results for its flagship obesity drug lorcaserin announced Monday morning were something of a wet squib. In short, yes lorcaserin seems to have cleared the approvability hurdles, and yes it has a nice safety profile, but none of this may matter much since it didn't cause dramatic weight loss on average.

The categorical endpoint looks pretty good. At twelve months, 47.5% of patients on lorcaserin lost at least 5% of their body weight -- double the amount of placebo patients that lost 5% of their body weight. The FDA requires 35% of patients and at least double the percentage of the placebo group to lose 5% of their body weight. In fact, about 23% of the lorcaserin patients lost 10% or more of their baseline weight, compared to 7.7% of the placebo group.

However, the mean weight loss endpoint fell short of expectations. Lorcaserin patients lost an average of just 5.8% of their body weight, or 3.6% placebo-adjusted. We had been hoping for something closer to 7% or 8% placebo-adjusted.

These results are even less appealing than those Orexigen (NASDAQ:OREX) delivered in January for Contrave, and especially disappointing in light of the similar level of weight loss shown in a mere twelve weeks in the Phase 2b study. It sure seems as though most of the benefit of lorcaserin is shown in the first few months of treatment, although the company insisted on the analyst call that this was not the case.

As with Contrave, the results so far are consistent with a smaller population of strong responders and a larger population of weak responders.

ARNA shares plunged on the news to close down over 28% at $3.23 Monday. Some investors may have thrown in the towel on the obesity space, as competitors Vivus (NASDAQ:VVUS) and OREX were down 2.5% and 4.5% respectively. This presents an attractive buying opportunity, since VVUS and OREX can only benefit from ARNA's stumble.

Disclosure: none