No Delay for Arena?

If history holds, it looks as if Arena Pharmaceuticals (Nasdaq: ARNA  ) is unlikely to have to wait an additional three months before the Food and Drug Administration decides the fate of its obesity drug lorcaserin. The PDUFA date, which is the FDA's goal for making a decision, is next Wednesday.

The drug went in front of an advisory panel last month, where some members suggested that the potential heart risks for the drug weren't enough to derail its approval and could be taken care of post-approval. If Arena had to turn in substantial additional documents -- proposed post-approval clinical trials or a Risk Evaluation and Mitigation Strategy -- the FDA was within its means to delay the decision by three months to review the extra paperwork. That's what happened to VIVUS (Nasdaq: VVUS  ) , which was supposed to hear about its obesity drug in April, but will have to wait until next month for a decision.

Based on recent FDA extensions, Arena would seem to be in the clear at this point. The agency has been notifying companies well ahead of their PDUFA dates.



Days Before PDUFA That the Delay Announced

Qnexa VIVUS 8
Adasuve Alexza Pharmaceuticals (Nasdaq: ALXA  ) 12
Lymphoseek Navidea Biopharmaceuticals 69

Source: news reports.

Of course, there are always exceptions to the rules. KV Pharmaceutical (NYSE: KV-A  ) announced a delay for Makena just one day before its PDUFA date. Not that the agency had a choice; KV's partner, Hologic, provided FDA-requested information within the week before the decision, so a delay couldn't have been announced sooner.

At this point, there are four scenarios I can see for lorcaserin:

  • The FDA sees no need for additional paperwork.
  • Arena turned in paperwork, but the FDA had no problem handling it and didn't require an extension.
  • History be darned, a delay is still coming.
  • The FDA wanted paperwork Arena didn't turn in, so no delay, but don't expect an approval next week.

The first two are obvious wins for Arena. The third might not be so bad; VIVUS has held up well after its delay. A delay is likely to be perceived as a sign that the FDA doesn't have any other issues with the drug. Why worry about post-approval requirements if the drug isn't going to be approved? Mind you, that isn't bulletproof logic. Alexza was still rejected after that delay, but a swift resubmission of Adasuve implies the issues raised in the CRL were easily addressable.

The biggest risk for investors at this point is that the FDA wants paperwork but Arena hasn't turned it in. How does something like that happen? I have no idea who's to blame -- an opaque FDA or an obtuse company -- but it certainly happens. The application to file Roche and ImmunoGen's (Nasdaq: IMGN  ) T-DM1, for instance, wasn't accepted by the FDA because the agency didn't think Roche tested the drug in the right patient population.

Given the volatility in Arena's shares over the past couple of days, it seems investors aren't sure what's going to happen at the binary event next Wednesday. Assuming it happens at all.

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Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of ImmunoGen. 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 (8) | Recommend This Article (6)

Comments from our Foolish Readers

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 June 23, 2012, at 10:44 PM, feelinIrie wrote:

    Hello Brian, I do hope there is no delay as you suggest may happen. My question is this:

    This quote was taken from the ADCOM transcript. Many people Pro VVUS feel this will at minimun cause REMS to kick in for ARNA.

    <This says it all....."Many panel members indicated that it was a very difficult vote

    and they reluctantly voted “Yes” that the benefits outweigh the risk for treatment of

    obesity patients since the magnitude of weight loss was moderate>

    Can I get your thoughts on this?


    when does the F.D.A. panel recieve the trancript? It was released to the public on Friday (6/18) and people are claiming the major drop was caused by people bailing after reading those comments.

    Thank you

  • Report this Comment On June 24, 2012, at 12:04 AM, helpmesav wrote:

    feelinIrie - come on, your are short arna or just plain stupid

  • Report this Comment On June 24, 2012, at 12:12 AM, feelinIrie wrote:

    That's pretty rude comment.

  • Report this Comment On June 24, 2012, at 12:14 AM, feelinIrie wrote:

    helpmesay, next thing you'll tell me is that I should believe we have a perfectly honest market system with no corruption and that everything is on the up.. Sorry I'm not like you and know everything.

  • Report this Comment On June 24, 2012, at 12:37 AM, voxlisa999 wrote:

    Read the just released 5/12/12 AdCom transcript NOT the Meeting Minutes, they are not accurate. The vote and each panelist's comments starts on page 348.

    Dr. Peter Gross- former FDA Chairman Drug Safety and Risk Management said, in discussing his vote:

    "On balance I thought the benefits clearly outweighed the risks. It's time to approve this drug. We did nor put our head in the sand. I think that the signals are not strong enough to require a risk management program." pg.382

    ALL of the panelists said monitoring could be done POST-APPROVAL.

  • Report this Comment On June 24, 2012, at 3:16 AM, genesis667 wrote:

    I don't think there will be a delay for ARNA.

    I do suspect however that Qnexa will either be rejected or have severe restrictions placed on it due to a poor side effect profile.

  • Report this Comment On June 24, 2012, at 8:55 PM, drdoctor123 wrote:

    You left out the part where Dr. Gross said they have to study the drug more for valvulopathy.

    Dr. Kaul said there is a signal! Not passing this time around. First drug approved in 13 years will not be one with low efficacy and no long term data. FDA can't take that risk. Qnexa works and has long term data.

  • Report this Comment On August 27, 2013, at 4:28 PM, chris293 wrote:

    This article was from June '13, 3 months has almost expired, what the news. One stock has gone up today. is there new news coming out?

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