This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Biotech Stock Mailbag: Fans Rally 'Round Arena

The Biotech Mailbag is open.

My column on Arena Pharmaceuticals (ARNA) and the looming release of phase III data on it's obesity drug lorcaserin seemed to hit a nerve with some die-hard Arena fans. Several people emailed to say I was too bearish and that I should not have quoted Canaccord Adams' analyst Adam Cutler, who downgraded the stock recently.

The flurry of Arena-focused email included (naturally) the tired claim that I was trying to drive down the Arena's stock price purposely at the bidding of my hedge fund overlords.

I stand by the column. It was a realistic look at the challenges Arena faces. Obesity drug development is fraught with risk, and the current drugs in development -- Arena's lorcaserin or the competing drugs from Vivus (VVUS) and Orexigen Therapeutics (OREX) -- haven't exactly inspired much confidence yet.

Biotech Select

Yes, Arena has engineered lorcaserin to avoid the cardiovascular toxicities seen with its chemical cousin fenfluramine, but at the same time, potential central nervous system side effects remain an under-appreciated risk.

Also under-appreciated by a lot of investors is how skittish regulators at the FDA and their counterparts in Europe are about the risk-benefit of any weight-loss drug. The bar for approval in this indication is going to be very high given all the safety missteps of the past.

Fat Americans are screaming for a pill that will help make muffin tops and beer guts disappear, but the FDA -- and ultimately the insurance companies who will be asked to pay for the drugs -- may not be as eager to deliver.

1 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs