Lorcaserin’s Path to Approval

Posted AtSeekingalpha.com

On Friday, October 22nd, Arena Pharmaceuticals (ARNA) finally learned the path forward for approval of Lorcaserin for weight loss. This came in the form of a Complete Response Letter (CRL) from the FDA. The last analysis I read showed that only around 30% of drugs are approved by the FDA on the initial NDA review so it isn’t a surprise that Arena received a Complete Response Letter, especially after the circus of their Advisory Committee review. The stock has been under heavy pressure since their briefing documents were released prior to the Advisory Committee. Hedge funds / shorts took full advantage of those briefing documents when millions of shares were dumped seconds after those documents came out, forcing a huge gap down at the open. Those shares were sold before anyone could have even opened the briefing documents, less alone have read them. It never mattered what was in those documents - - the shorts were going to bring the stock down no matter what, and they did a great job of it.

All Arena investors expected the biggest discussion point at the Advisory Committee and within the hallways of the FDA, to be whether or not Arena ruled out an increased risk of valvulopathy. When the FDA brought up a previously unknown risk of mammary neoplasms, everyone was caught off guard, except perhaps those who may have had an advanced look at the briefing documents. The FDA then proceeded to conduct the Advisory Committee without any experts in toxicology or pathology among panel members. The FDA had 3 cardiologists on the panel since valvulopathy was to be a major discussion point, but not a SINGLE expert on the panel that could speak to the neoplasm risk, a decision the FDA said they later “regretted.” This is such a gross error that it is hard to justify and forgive. Those who followed my live blog on the Advisory Committee or watched it live themselves, saw how the neoplasm risk left panel members feeling “confused,” “spooked” and “unqualified” to understand the risk for humans. Despite Dr. Kaul’s assertion that the neoplasm risk meant little to him and to most others in their vote against approval of Lorcaserin, a review of their vote deliberation shows that as many as 8 out of the 9 votes (Kaul the exception) were concerned about the neoplasm risk. Had that not been a focus of the panel, or if the FDA had included a couple of experts on the panel to explain the risk, the FDA may have approved Lorcaserin at the first pass. I find it very concerning that Dr. Kaul would bother with giving quotes to the likes of Forbes or any financial publication, especially prior to the disclosure of the FDA’s review.

Nov 03, 2010