Shares of Arena Pharmaceuticals Inc. rose Monday after the drug developer said a review of its late-stage obesity drug Lorcaserin shows no heart safety issues after one year.
An independent safety monitoring board conducted a 12-month echocardiogram analysis of Lorcaserin, following up a six-month review released in September. The results mean Arena's two-year, 3,200-patient BLOOM trial will continue to fruition with no further board reviews.
Lorcaserin was under scrutiny because it has similar characteristics to Wyeth's former fen-phen diet pill, once touted as a miracle drug but which later was found to cause heart-valve damage, sparking massive lawsuits. The drug was yanked from the market about 10 years ago.
Banc of America Securities analyst William Ho said in a note to clients he believes passing the 12-month safety hurdle is significant, "as we found the majority of primary care physicians prescribe obesity drugs for a six- to 12-month period according to our June 2007 survey."
Ho said he expects final BLOOM data to be released around this time next year with a new drug application to follow thereafter.
Oppenheimer & Co. analyst Bret Holley said results from the 12-month safety reviews provides "overwhelming evidence that the risk of adverse cardiovascular side effects associated with lorcaserin is minimal, and clearly differentiates the drug from fenfluramine (fen-phen)."
Holley said the data should place Arena in a stronger position to negotiate a major marketing partnership for the drug, although the timing of such a partnership agreement is uncertain. The analyst said Arena shares are "substantially undervalued" anywhere below $12.
Shares rose 5 cents to $6.36 in morning trading.
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