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Arena Pharma's Own Data Point to Weight-Loss Drug Rejection

SAN DIEGO (TheStreet) -- Last week's column on Vivus (ARNA - Get Report) and Arena Pharmaceuticals (VVUS - Get Report) drew some strong reactions from the Arena faithful, almost all of whom were spitting mad that I dared say publicly what almost everyone else already believes:

Arena's weight-loss drug lorcaserin isn't going to be approved any time soon. FDA, however, is getting ready to approve Vivus' Qnexa.

In particular, the "Areniacs" accused me of lying about lorcaserin and being paid off to write disparaging, false and misleading statements about Arena by short sellers and other criminal market manipulators. This paragraph, in particular, raised a fuss:

"Lorcaserin isn't much more than a placebo (a paltry 3% weight loss) with the added bonus of causing tumors in rats. Arena's has failed to disprove a link between the lorcaserin-fueled rat tumors and the potential for breast cancer in humans, despite the company's claims to the contrary. And let's not forget the risk of heart valve damage that still lingers over lorcaserin, a chemical cousin to the infamous and dangerous fenfluramine."

A personal injury lawyer from Michigan was so upset that he got together with a bunch of Arena retail shareholders -- financially conflicted all -- and wrote me a letter demanding a retraction to my "terrorist style hit-piece [sic] designed to put lorcaserin 10 mg BID in false light."

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Apparently, writing a column predicting the rejection of a weight-loss drug because it doesn't help people lose weight and is potentially unsafe is a terrorist act.

A retraction is not going to happen, but I will follow up and explain more fully why I believe FDA isn't going to approve lorcaserin based on the data available.

Some cautious words from Arena's recently filed 10-K to get started:

"We expect the FDA to conduct a benefit-risk assessment based upon the totality of the new and previously provided data to determine the approvability of lorcaserin. It is important to note that the FDA may analyze or weigh the data differently than we or others do. (Emphasis mine.)

"Others" include Arena bulls who post obsessively on stock message boards.

More warnings from Arena:

"In addition, the analyses we included in the resubmitted lorcaserin NDA include estimates based on certain assumptions and extrapolations. The FDA may accept our assumptions and extrapolations or may use different ones in analyzing the data, which could lead the FDA to reach different conclusions. (Emphasis mine.)

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We already know FDA reached a "different conclusion" about lorcaserin during the first review. The drug was rejected. In doing so, FDA raised a number of safety issues and concerns focused mostly on lorcaserin causing tumors in rats and the potential risk for similar tumor formation (including breast cancer) in humans.

Arena re-analyzed old rat data and conducted some new rat studies to collect more data to alleviate the FDA's concerns about lorcaserin-fueled tumor growth. Arena bulls are convinced the new data exonerate lorcaserin. I look at the same data and walk away believing the opposite. At best, these new data are inconclusive i.e. the data neither confirm nor reject lorcaserin's link to tumor formation. That's not good, and coupled with concerns about lorcaserin's potential to cause heart valve damage and weight-loss efficacy not much greater than placebo, FDA will reject lorcaserin a second time.

Let's take a look at the evidence to support the "lorcaserin is not approvable" thesis:
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