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The Food and Drug Administration turned down Arena Pharmaceuticals' (Nasdaq: ARNA  ) obesity drug, lorcaserin, on Friday. No big shocker there.

Nor were the issues the agency cited in its complete response letter, a euphemism for rejection. Those same issues led the FDA advisory panel to recommend against the drug's approval.

Less clear is exactly what will satisfy the agency, and how long that'll take. Lorcaserin's path to approval boils down to separate but related issues.

First, lorcaserin produces cancer in rats. Arena thinks this is a rat-specific issue that isn't relevant to humans. I agree, but proving that may be quite difficult. Arena really needs to prove definitively why rats get tumors, and how it isn't relevant to humans, because proving that lorcaserin doesn't cause cancer in humans is much harder.

Second, lorcaserin's marginal efficacy remains uncertain. The FDA requested data from a trial called BLOOM-DM in type 2 diabetics. The top-line data is scheduled to be released in the next few weeks, and the full report should be available around the end of the year. Diabetics typically lose less weight than non-diabetics on diet drugs, so it's going to be hard to show an increase in efficacy. At best, Arena may be able to show decreased blood sugar levels, which is a marker for better prognosis for type 2 diabetics.

The two issues are related because the FDA always balances risk and benefits -- side effects and efficacy -- when approving drugs. A drug that worked so well that all obese people who took it reached their target weight could afford to have some side effects. Shedding those pounds would, after all, prevent other health risks. Unfortunately, that miracle drug doesn't go by the name lorcaserin, Qnexa, or Contrave. The latter two, from VIVUS (Nasdaq: VVUS  ) and Orexigen Therapeutics (Nasdaq: OREX  ) respectively, are also up for FDA review.

All three have issues that may prevent them from landing on the right side of the risk-benefit analysis. The fate of Wyeth's fen-phen and Abbott Labs' (NYSE: ABT  ) Meridia and sanofi-aventis' (NYSE: SNY  ) Acomplia -- none are on the market -- should have investors worried that the FDA may move the line, requiring more benefit and less risk.

With a market cap of $180 million and guidance for $150 million in the bank at end of year, investors aren't putting much value on Arena's assets, mainly lorcaserin. The stock could be a good bet here; the most you could lose is all your investment, but the upside is huge if lorcaserin is approved. Unfortunately, predicting when, let alone if, the FDA will ever approve the drug is difficult.

Let's give it a shot anyway. Take the poll below and see what fellow Fools think of lorcaserin's chances.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.

Read/Post Comments (4) | Recommend This Article (1)

Comments from our Foolish Readers

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  • Report this Comment On October 25, 2010, at 8:48 PM, BlueInsight wrote:

    Actually, it would be MUCH harder to prove the mechanism of tumorigenecity in rats (or any organism for that matter), than to prove that it isn't relative to humans. Truth is there are many treatments for human neoplasms of which we have little to no idea about how they develop. But there are MANY medications that cause tumors in rats (especially the particular strain of rats that Arena tested lorcaserin on: Sprague-Dawley).

    Luckily the FDA is NOT asking for the mechanism of tumor development in rats. That is an issue that the investors have already taken the FDA to task over and should not be an issue going forward.

  • Report this Comment On October 26, 2010, at 1:53 AM, techperson wrote:

    A CRL is NOT a "euphemism for rejection." "Not approvable" is a euphemisim for rejection, and is one of the three possible FDA responses. The other two are "approvable" and "complete response letter." A CRL can be difficult or easy. This one is easy. The FDA wants an independent panel of toxicologists to review the rat cancer data, which can happen quickly. Lorqess did not cause cancerous tumors at anything less than 50x the human dosage. The FDA standard for not worrying about human tumors is 25x. Case closed. With NO safety issues and rather dramatic efficacy in completers, look for approval by mid-2011. See

  • Report this Comment On October 26, 2010, at 8:27 AM, BioBat wrote:


    while tumor incidence wasn't statistically significantly higher until the 50x dose (with a 95% confidence interval), you'd be a fool to say it wasn't higher at all doses because it was although it didn't meet 95% confidence.

    Additionally, ARNA hasn't really addressed the increased incidence of more aggressive mammary tumors at the 7x dose in female rats. At that dose, rats were twice as likely to succumb to cancer during the study (15 in control vs. 31 in the low dose treatment). Death from both benign and aggressive tumors was higher.

    In order to alleviate those concerns, ARNA will have to establish a well defined mode of action of tumor formation - that's something that could potentially take years.

  • Report this Comment On October 28, 2010, at 12:42 PM, egpdwin wrote:

    I attended the FDA committee meeting and agree with techperson. It seemed odd that there was discussion from the panel about the rat to human significance and the FDA staff present didn't appear to have an expert present to offer guidance. I think we need a Fat Attack Day (visit for more detail).

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