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Biotech Stock Mailbag: Amarin, Spectrum, Arena

Stocks in this article: AMRN SPPI ARNA CELG ALTH

Arena conducted three-month rat studies that relied on biomarkers of mammary tumor growth to prove its case. The FDA asked Arena to conduct 12-month rat studies, which would provide more definitive proof. When is it a good idea to ignore the FDA's recommendations?

If you want to better understand FDA concerns about the role lorcaserin may play in tumor growth, you can check out the agency's presentation from Arena's advisory panel in September 2010. In particular, look at slide 17, which shows how d-fenfluramine raised prolactin levels in rats more than lorcaserin. D-fenfluramine and lorcaserin are similar drugs. However, as the FDA points outs, d-fenfluramine did not produce mammary tumors in two-year rat studies.

This suggests lorcaserin may be causing mammary tumors in rats through some mechanism other than by raising prolactin levels. That's why FDA asked Arena to run longer animal studies. Without those data, I don't see how the FDA is going to be confident enough in lorcaserin's safety to approve.

Outside of the rat tumor issue, lorcaserin may also cause heart valve defects, according to data from a follow-on study of the drug when to treat obesity in diabetics. The FDA will be reviewing these data from the diabetes study for the first time since they were not included in Arena's original submission. The cardiovascular risk of lorcaserin is probably a bigger problem than rat tumors, but it's something the company and its supporters tend to brush under the rug.

The FDA approves drugs when the benefits outweigh the risks. We already know that the FDA considers lorcaserin's weight-loss benefit to be "marginal" yet the safety risks are significant. For Arena, that's not a winning formula.

--Written by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
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