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Diet Pill Maker Arena Pharmaceuticals' Stock Jumps Ahead of US Review


A panel of expert advisers to the FDA will consider the risks and benefits of approving Arena's weight-loss drug Thursday. Agency staff continue to focus on safety concerns.

MINYANVILLE ORIGINAL Diet pill maker Arena Pharmaceuticals (ARNA) is trading higher Tuesday on hopes that the company is on a path to US approval for the first new weight-loss drug in more than a decade.

There are still a number of questions to be resolved, however. A review of the drug by Food and Drug Administration staff released Tuesday morning notes that there are still concerns about the side effects of Arena's drug, lorcaserin, including the risk of stroke and other other cardiovascular issues, heart valve disease, and cancer. There's also some question about how well the drug works.

On Thursday, a panel of expert advisers to the FDA will meet to discuss the risks and benefits of lorcaserin and will give the agency a recommendation on possible approval. The FDA isn't bound by the decision and has rejected drugs even if they are endorsed by an advisory committee.

Having been rejected in 2010, Arena has responded to the the safety concerns. And another positive sign for Arena: The documents released Tuesday contained no big surprises, such as new safety issues. Click here for a list of questions the advisers will be asked to discuss at the meeting.

In late-morning trading, Arena shares rose 14% to $3.10. The shares were up more than 20% earlier in the day.

Arena is in a race with other companies to bring a diet drug to market. The FDA set a date of June 27 to make a decision on lorcaserin approval. After rival drug maker Vivus (VVUS) won an endorsement from an FDA advisory panel in February, the agency delayed a decision on that drug. Now, the agency is scheduled to rule on Vivus' drug, Qnexa, by July 17. Another company, Orexigen Therapeutics (OREX), is also developing a diet pill. That company won the backing of FDA advisers in early 2011 only to become the third diet pill maker rejected by the agency. (Vivus and Arena were turned down in 2010.)

Vivus shares fell 7% to $21.91 Tuesday. The stock is still up 125% this year.

A number of investors laid bets this year that both Vivus and Arena will win backing for their diet pills. The companies argue their products are needed as obesity is a crisis in the US, leading to heart disease, diabetes, and other health risks. Shares of Arena are up 66% this year. Orexigen fell 2% to $3.45 Tuesday but is up 114% this year.

Some analysts speculate that Vivus will be acquired. It recently won approval of erectile dysfunction drug Stendra and the company has no partner to help sell Qnexa if the drug is approved. Arena is partnered with Japanese drug maker Eisai to help sell lorcaserin. Orexigen has a deal with Takeda, another pharmaceutical company from Japan, to sell Contrave if that product is ever approved.

Twitter: @brettchase

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