For investors who believe in the predictive power of Wall Street, things are not looking good for Arena Pharmaceuticals (Nasdaq: ARNA), the small biotech that is facing an FDA panel meeting for its potential obesity drug lorcaserin. Amidst downgrades and worries about FDA concerns regarding safety and efficacy, Arena shares were off more than a third midday Tuesday. This follows in the wake of the surprising recommendation against approval in July for Vivus' (Nasdaq:VVUS) drug Qnexa and widespread uncertainty regarding Orexigen's (Nasdaq:OREX) Contrave.
Is the Data Good Enough?
The biggest problem for Arena is the efficacy data. Although the one-year efficacy data on lorcaserin is okay, it is no blockbuster. More than 47% of patients who took lorcaserin in the BLOOM trial lost 5% or more of their baseline weight (versus about 20% in the placebo group), with an average loss of 5.8%. More than one in five people who took Lorcaserin saw better than 10% weight loss.
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Note: The editors at Investopedia made a small error here in the original version, capitalizing "lorcaserin", "valvulopathy", and "fenflueramine". That should all be changed and corrected soon.
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