Arena Pharmaceuticals Inc. (ARNA:US) jumped the most ever after the company’s weight-loss pill gained the backing of an advisory panel, putting two obesity drugs in line for U.S. approval almost two years after regulators rejected them as too risky.
Arena rose 74 percent to $6.36 at 4 p.m. New York time, the biggest increase since the company’s shares began trading publicly in July 2000.
Food and Drug Administration advisers voted 18-4 yesterday that the benefits of Arena’s pill, known as lorcaserin, outweigh the risks. The FDA is scheduled to decide by June 27 on lorcaserin, and doesn’t have to follow the panel’s advice.
Arena, based in San Diego, is competing with Mountain View, California-based Vivus Inc. (VVUS:US) and Orexigen Therapeutics Inc. (OREX:US), based in La Jolla, California, to introduce the first weight- loss drug since Roche Holding AG’s (ROG) Xenical in 1999. The FDA previously turned down all three drugs. Panel members raised concerns that lorcaserin provides a modest benefit while potentially raising heart risks.
“It’s time to approve this drug,” said Peter Gross, a panel member and chairman of the Hackensack Physician-Hospital Alliance in New Jersey. “We do not put our head in the sand.”
Vivus climbed 8.9 percent to $24.70, while Orexigen increased 19 percent to $3.99.
Panel members suggested that if lorcaserin gains approval, Arena should do follow-up studies on how it affects the heart. The FDA advisers made the same suggestion for a post-market study of Vivus’s pill Qnexa after backing it 20-2 in February. The agency is scheduled to decide on Qnexa by July 17.
More than 78 million U.S. adults are obese, according to the Centers for Disease Control and Prevention in Atlanta. Obesity raises the risks of diabetes, heart attacks and stroke, and costs the U.S. economy an estimated $147 billion a year in medical expenses and lost productivity, according to the CDC.
“The advisory committee’s positive vote supports our belief in lorcaserin as a potential new treatment option,” Jack Lief, Arena’s president and chief executive officer, said in a statement. Arena has licensed lorcaserin to Tokyo-based Eisai Co. (4523) to sell in the U.S.
In failing to approve lorcaserin in October 2010, the agency said people didn’t lose enough weight on the medicine to justify the risk of developing cancer associated with the drug. The company resubmitted its application to the FDA for review in January with new data.
New analysis allayed cancer concerns, Abraham Thomas, chairman of the panel and head of the endocrinology and diabetes division at Henry Ford Hospital in Detroit, said after voting in support of the pill.
An FDA staff report May 8 determined the risks of cancer may be smaller than thought. An agency review of the potential for humans developing brain tumors seen in rats tested with lorcaserin found the risk is negligible, agency staff said in the report. They also determined benign breast tumors in rats were more common than malignant ones at all dose levels.
Lorcaserin affects an area of the brain that controls appetite and metabolism, according to Arena. It works in a similar way to fenfluramine, part of the fen-phen appetite- suppression drug combination pulled from pharmacies 15 years ago when it was linked to heart-valve abnormalities.
Some panel members suggested the FDA require lorcaserin to include a risk management plan that possibly screens patients for abnormalities before starting treatments and warns patients about the potential of developing a valve abnormality.
Patients who tested Arena’s treatment in three studies lost about 3 percent more of their body weight than those who took a placebo, according to FDA staff. People who took part in trials on Vivus’s Qnexa lost 6.7 percent and 8.9 percent more of their body weight on mid and high doses compared to those who used a placebo, FDA staff said in a Feb. 20 report on the drug.
Panel members who voted against lorcaserin questioned whether the weight loss was enough.
“Weight loss is clinically discernible with lorcaserin but I’m not sure it’s clinically meaningful,” said Sanjay Kaul, a panel member and professor at the David Geffen School of Medicine at the University of California, Los Angeles.
Like Arena’s lorcaserin, the FDA declined to approve Vivus’s Qnexa in October 2010. Orexigen won a panel’s backing in December 2010 before the agency declined to approve the company’s drug, Contrave. Orexigen, developing Contrave with Osaka, Japan-based Takeda Pharmaceutical Co. (4502), agreed in September to conduct a two-year study of the medicine’s heart risks.
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