Thanks for Nothing, Fen-Phen

Arena Pharmaceuticals (Nasdaq: ARNA  ) can blame it on Wyeth's fen-phen. And Abbott Labs' (NYSE: ABT  ) Meridia. And sanofi-aventis' (NYSE: SNY  ) Acomplia. Heck, you might as well throw Merck's (NYSE: MRK  ) Vioxx in there, too.

The Food and Drug Administration -- and the experts it brings in for advisory panel meetings -- have become even more risk adverse after seeing what can happen when side effects are discovered after approval. That's especially true for obesity drugs where diet and exercise have few side effects beyond growling stomachs and sore muscles.

An FDA advisory committee recommended against approving Arena's Lorcaserin by a vote of 9-5. In clinical trials, Lorcaserin had a better safety profile than VIVUS' (Nasdaq: VVUS  ) Qnexa, which was shot down 10-6. But there's still that inkling of a possibility that side effects could crop up, and it's a lot harder to prove that something like side effects don't occur than proving that something does occur. The "just barely works" efficacy didn't help much either.

Watch out, Orexigen Therapeutics (Nasdaq: OREX  ) . You're next.

While the FDA isn't required to follow the panel's recommendation in Arena's case, I have a hard time seeing the agency going against the experts. Can you imagine the outcries if they approved the drug against a panel's warnings and then side effects did turn up?

Lorcaserin might not be completely dead yet. The panel is interested in data in patients who would be most likely to use the drug, like diabetics. Arena is running a clinical trial in diabetics right now, which could help pile the safety data high enough to get over the FDA's high safety wall.

Another possibility is to somehow increase the efficacy. Lorcaserin increased weight loss by less than 4 percentage points on average in one of the studies; patients taking Lorcaserin lost 5.8%, while patients taking a placebo lost 2.2%. But when you look at the proportion of patients who lost more than 10% of their body weight, Lorcaserin more than tripled the rate that the placebo was able to obtain.

What that means is there's a subset of patients for which Lorcaserin works really well. If Arena can figure out who they are, and run a trial on them specifically, it might be able to lower the safety wall enough to gain approval.

Either way, it looks as if Arena will need more data to get Lorcaserin approved. Thanks for nothing, fen-phen.

Interested in keeping track of Arena as its FDA decision date approaches? Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on Arena.