Updated from 12:19 p.m. EDT

Arena Pharmaceuticals ( ARNA) executives spent the better part of an hour-long conference call Monday morning defending the clinical benefit and safety of the company's weight-loss drug lorcaserin as shares of the company sank in early trading.

The San Diego-based drug company reported that patients treated with lorcaserin lost an average of 12.7 pounds, or 5.8% of their body weight, over one year. However, patients in the study treated with a placebo lost an average of 4.7 pounds, or 2.2% of their body weight, over the same one-year period.

That puts the placebo-adjusted weight loss in the study at 3.6%, below the 5% weight-loss standard for approval mandated by the Food and Drug Administration for all experimental obesity drugs.

Arena shares closed Monday down 28.2% to $3.23.

On the conference call, Arena CEO Jack Lief defended lorcaserin and the data from the phase III "BLOOM" study, saying it successfully achieved all three of the study's primary efficacy and safety goals.

"In the real world, doctors care about three things: Can I prescribe the drug in a majority of my patients? Will patients lose weight quickly and can they stay on drug long term? And will patients lose a meaningful amount of weight long term? I think the BLOOM study answered all those questions with a resounding yes," said Lief.

Many weight loss experts, however, do not consider anything under 5% weight loss after one year of treatment to be clinically meaningful for patients.

"Lorcaserin did meet one of the FDA's efficacy criteria for approval, but the 3.6% placebo-adjusted weight loss is not much better than what we've seen from other marketed weight loss drugs," said Lazard Capital Markets analyst Matt Osborne, who has a hold rating on Arena.

Osborne was referring to the study result that showed 47.5% of lorcaserin patients lost greater than 5% of their body weight compared to 20.3% of placebo-treated patients. This doubling of the percentage of patients reporting clinically meaningful weight loss does satisfy of the FDA's approval standards for weight-loss drugs.

To put the lorcaserin results in another perspective, a one-year regimen of intensive diet, exercise and counseling resulting in patients losing 5.1% of their body weight in a recently disclosed phase III study of a competing diet pill from Orexigen Therapeutics ( OREX).

That pill, known as Contrave, caused patients to lose 9.3% of their body weight over one year, for a placebo-adjusted total weight loss of 4.2%

Back to the BLOOM study results, lorcaserin was not associated with greater statistical risk for heart valve damage compared to placebo over one year of treatment. At 12 months, 2.7% of lorcaserin patients reported some heart valve damage compared to 2.3% for placebo-treated patients. After two years of treatment, the respective rates of heart rate damage were 2.6% for lorcaserin patients vs. 2.7% for placebo patients.

Lorcaserin has been under close scrutiny for heart valve damage because the drug is a close chemical cousin to fenfluramine, or the "fen" in the effective but unsafe fen-phen diet pill combination regimen of the 1990s.

Lorcaserin and fenfluramine both work through an effect on a receptor in the body that regulates levels of serotonin, a brain chemical that can increase feelings of satiety, or fullness. Arena has chemically engineered lorcaserin to be much more specific so that it targets only the serotonin receptor controlling satiety while not affecting related receptors that might trigger heart damage.

On Monday's conference call, Arena executives expressed confidence that the heart valve risk with lorcaserin was put to rest once and for all.

Arena is conducting another phase III study of lorcaserin, dubbed "BLOSSOM" with results expected in September. In June, competitor Vivus ( VVUS) is expected to announce results from phase III studies of its obesity drug.

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