FDA staff question Arena diet drug, shares plunge

WASHINGTON (Reuters) - Arena Pharmaceuticals Inc's proposed diet pill worked only "by a slim margin" and raised concerns about memory loss, tumors in lab rats and other problems, U.S. reviewers said in an analysis that sent the company's shares tumbling 37 percent on Tuesday.

The questions from Food and Drug Administration staff stirred doubts among investors that the small San Diego-based company could win approval to sell the drug, lorcaserin. FDA advisers will review Arena's drug on Thursday as three companies race to launch the first new diet drug in a decade.

The medicine is vital to Arena, a small company with no approved drugs on the market and other medicines still in early testing. Japan's Eisai Co holds U.S. marketing rights to lorcaserin.

Consensus forecast data from Thomson Reuters shows analysts expect Arena's drug could reach peak annual sales of $822 million if it reaches the market.

Drugmakers have failed for decades to produce a pill to help people shed a significant number of pounds without serious side effects.

Highlighting the troubled market, FDA advisers also meet this week to consider if Abbott Laboratories Inc's weight-loss drug Meridia should be pulled off the market over heart risks.

FDA reviewers, in 270 pages of analysis prepared for the advisory panel, said one of the lorcaserin doses Arena tested met one set of agency criteria for effectiveness "by a slim margin." In company studies, patients who took 10 milligrams of lorcaserin twice daily for a year lost about 5.8 percent of their body weight on average. Placebo patients lost 2.5 percent.

The FDA staff also said heart-valve disease, psychiatric and memory problems and cancerous tumors in rats were "three noteworthy safety issues" for the advisory panel to consider as it considers whether to recommend approval of lorcaserin.

Oppenheimer analyst Bret Holley said "the specter of cancer could derail" the drug's approval. FDA reviewers noted various types of tumors in rats given lorcaserin but saw no higher cancer rate in people who took the drug. The rats got doses as much as 17 times higher than the proposed level for people.

Still, "we believe it will be very difficult for (Arena) to rule out a cancer risk to the FDA's satisfaction," Holley said in a research note.

Leerink Swann analyst Steve Yoo said the advisory panel "may pose a challenge" for Arena, adding that the current share price around $4 "better reflects risk/reward associated with this difficult-to-predict binary event."

Two rival companies, Vivus Inc and Orexigen Therapeutics Inc, have weight-loss pills under FDA review this year, and their shares also fell. Orexigen fell 6.5 percent to $4.79 and Vivus dropped 1.8 percent to $6.03 in afternoon trading on Nasdaq.

Even with the drop on Tuesday, Arena shares remained up 20 percent this year. Shares of Vivus were down 35 percent for the year, sparked by an FDA panel's rejection of the company's weight-loss drug in July. Orexigen, which is set to take its diet pill to an FDA panel in December, has fallen 36 percent this year.

DIZZINESS, FATIGUE AND ABNORMAL DREAMS

Arena, in a summary for the panel, said lorcaserin's benefits "substantially outweigh the potential risks." The company said new approaches to the U.S. obesity epidemic were "urgently needed."

Lorcaserin was designed to block appetite signals in the brain in a similar way to the now withdrawn fenfluramine in the fen-phen diet drug cocktail. The Arena drug is more selective in the receptors it affects, and the company says studies have not found any heart problems linked to the medicine.

The FDA asked Arena to study if lorcaserin might harm heart valves as fenfluramine did. In the agency analysis, reviewers said Arena's data "allow one to rule out a 55 percent or greater increase" in the risk of heart valve disease.

Problems such as dizziness, fatigue and abnormal dreams were reported in 21 percent of patients treated with one lorcaserin dose compared with 12 percent for placebo, the FDA staff said. Memory impairment and related problems were reported "infrequently" but three times higher with lorcaserin than a placebo, they added.

An FDA decision on lorcaserin is due by October 22, Arena has said. The drug's proposed brand name is Lorqess.

Arena is developing three other drugs for treatment of blood clots, sleep disorders and pulmonary arterial hypertension but all are in early testing.

Shares of Arena dropped 37 percent to $4.32 in afternoon Nasdaq trading.

(Reporting by Lisa Richwine; Editing by Lisa Von Ahn, Dave Zimmerman)

WhatsAppFacebookTwitterLinkedinBeloudBluesky