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.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.