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Let the Obesity-Drug Wars Begin

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Arena Pharmaceuticals' (Nasdaq: ARNA  ) lorcaserin advisory committee win wasn't as good as VIVUS' (Nasdaq: VVUS  ) 20-2 endorsement of its obesity drug, but I'd put the 18-4 vote in the "good enough" column. Even if you count the copout abstention that one panelist cast as a negative, it's still a pretty solid endorsement, and by a higher margin than I was expecting.

The agency doesn't have to follow the committee's recommendation. But given the generally positive briefing documents for the committee, which are written by the FDA reviewers, Arena's chances for approval look pretty good to me.

The one area where the FDA seemed iffy was the potential for lorcaserin to cause problems with heart valves, but only one of the cardiologists on the panel voted against the approval. It looks like any potential heart issues can be taken care of in a post-marketing study, unlike Orexigen's (Nasdaq: OREX  ) Contrave, which had a strong enough signal to require a pre-approval study.

Two of the "no" votes were cast by toxicologists, which is a little worrisome since it seemed like the potential to cause cancer had been put to rest by the agency. The big unknown is how much influence the outside toxicologists on the panel will have on changing the opinions of the internal toxicologists reviewing the drug. An approval certainly isn't a sure thing. Then again, it never is.

Arena's PDUFA date is June 27, which puts it first in line after the decision on VIVUS' Qnexa was delayed to work out the details of the REMS. It seems possible that lorcaserin will also be delayed for the same reason. The company hasn't submitted a REMS, but if the FDA goes along with some panelist's recommendation that doctors perform routine heart checks of patients taking lorcaserin, it would likely need to be regulated through a REMS. Discussions on post-marketing requirements could also delay an approval.

But investors shouldn't get hung up on who gets approved first. Neither company looks like they'll be ready to launch when the drug is approved. VIVUS doesn't have a marketing partner in place, and Arena and its marketing partner Eisai might have to wait four to six months for DEA scheduling if lorcaserin is deemed a controlled substance.

The REMS -- or lack thereof if Arena doesn't get one -- might ultimately affect sales, though. As we've seen with other drugs -- the bioscan requirement for Spectrum Pharmaceuticals' (Nasdaq: SPPI  ) Zevalin, for instance -- making doctors jump through hoops can hold down sales.

While you're waiting to see who wins the obesity-drug war, take a look at what Fool analysts believe is the next rule-breaking multibagger. Get the free report.

Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (6) | Recommend This Article (12)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 12, 2012, at 11:34 AM, paxmaker wrote:

    Your comment on the Arena heart valve issue is a bit misleading. The problem was not that there was evidence that lorcaserin causes heart valve problems, but that the incidence in the non-intervention comparative group (placebo) was so low that lorcaserin could only approximate a 65% confidence level in the statistical analysis. The FDA recognized this. At worst, this may require some form of post approval study to raise the numbers analyzed. There is NO indication in reality that lorcaserin caused heart valve problems on the trials conducted.

  • Report this Comment On May 12, 2012, at 2:50 PM, mincasa wrote:

    As an investors I see ZERO benefit by reading this article. All three drugs are bound to be approved, sooner than latter. Arena's will be first.

  • Report this Comment On May 12, 2012, at 3:16 PM, portefeuille wrote:

    could only approximate a 65% confidence level


    pooled relative risk of VHD at week 52 is 1.16 with a 95% CI of (0.81,1.67).

    see table 48 (101/246) here.

  • Report this Comment On May 12, 2012, at 6:05 PM, hiddenflem wrote:

    that's well within the realm of statistical chance.

  • Report this Comment On May 18, 2012, at 10:32 AM, bmc007 wrote:

    The only problem in a word - KAUL!!!!

    Anyone following ARNA closely will know what this means and if you don't it might be worth your while to find out.

  • Report this Comment On May 18, 2012, at 6:04 PM, SocialRespInvest wrote:

    Since so many people in the US are obese I assume that many reading this board are classified as obese. (I am!)

    Just curious whether any Fools plan to take one or the other of these pills. (I don't.)

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