* Panel votes 9-5 that risks outweigh benefits
* FDA usually follows panel recommendations
* Pill is vital to Arena, shares tumble nearly 40 pct
* Shares of rival Orexigen jump 38 percent
(Adds detail on Arena drug, further adviser quote, background
on obesity drugs)
By Lisa Richwine
ADELPHI, Md., Sept 16 Arena Pharmaceuticals Inc
(ARNA.O) suffered a major setback on Thursday when U.S.
advisers rejected its proposed weight-loss pill amid concerns
that tumors in rats might indicate a risk of cancer in humans.
Lorcaserin, Arena's most advanced drug candidate, is the
second diet drug to stumble in a race among three small
companies to launch the first new prescription diet drug in a
Arena shares fell nearly 40 percent in after-hours trading
Thursday to $2.28. The shares had been halted in regular
trading pending results of the advisory meeting.
The stock is down 67 percent from Monday's close, with many
investors fleeing the shares on Tuesday after the U.S. Food and
Drug Administration issued documents raising safety concerns
that included the rat tumors and memory loss.
Shares of Orexigen Therapeutics Inc (OREX.O), still to face
an advisory panel on its diet pill, rallied 38 percent to $6.77
The advisory committee voted 9-5 that potential risks from
long-term use of Arena's lorcaserin outweighed possible
benefits from modest weight loss. Panelists said they were
unsure if tumors in lab rats meant the drug would increase
brain or breast cancers in people.
"I do think (lorcaserin) is promising, but there's too much
uncertainty at this time," said Jessica Henderson, the panel's
An FDA panel in July urged against approval of a diet drug
from Vivus Inc (VVUS.O) after voicing concern about depression,
memory loss and potential birth defects. Vivus shares fell 1.4
percent on Thursday.
Orexigen's drug, Contrave, is expected to face FDA advisers
Timeline and facts about obesity drugs [ID:nN15272713]
Graphic on extent of obesity problem in the U.S.
The expert panel called on Thursday for more study of
Arena's lorcaserin in people with diabetes, high blood pressure
and other health problems, to better reflect patients who would
use the drug if it was approved.
The FDA usually follows panel recommendations. A final
ruling is due Oct. 22.
The probability of lorcaserin ever reaching the market is
"really small," BMO Capital Markets analyst Jason Zhang said
after the panel vote.
"They can run a large trial in a high-risk group and see if
that will show similar efficacy but a better risk profile.
That's a little remote," Zhang said.
Arena said its drug was safe at recommended doses and would
help fight the U.S. obesity epidemic. Japan's Eisai Co (4523.T)
holds the U.S. marketing rights to lorcaserin.
"I just couldn't get over that we didn't have a broader
population that was representative of people most likely to get
this (drug)," said Dr. Lamont Weide, an advisory panel member
and chief of diabetes and endocrinology at the University of
Missouri in Kansas City.
Arena is studying lorcaserin in overweight and obese
diabetics and said it expects results later this year.
The companies believe the drug has "a positive benefit-risk
profile" and Arena "will work closely with the FDA" on its
review, Arena Chief Executive Jack Lief said in a statement
handed to reporters shortly after the committee vote.
Consensus forecast data from Thomson Reuters showed
analysts expected Arena's drug could reach peak annual sales of
$822 million if it reached the market.
Drugmakers have failed for decades to produce a pill to
help people shed a significant amount of weight without serious
Risks of current options were highlighted on Wednesday when
U.S. advisers agreed tougher action was needed on Abbott
Laboratories Inc's (ABT.N) diet drug Meridia, but split on
whether it should be banned. [ID:nN15139776]
Arena's 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 of the heart-valve problems with
lorcaserin that were linked to fenfluramine.
Arena also argued the findings of rat tumors did not apply
to people because they resulted from high doses or biological
mechanisms specific only to rodents. No increase in cancer
cases was seen in people.
Patients who took 10 milligrams of lorcaserin twice daily
for a year lost about 5.8 percent of their body weight on
average, FDA reviewers said. Placebo patients lost 2.5
Prescription weight-loss drugs have failed to gain much
traction in the United States, despite the potential for strong
sales in a nation where two-thirds of the population are
overweight or obese. The current U.S. diet drug market is small
at about $381.5 million in 2009, according to data from IMS
Arena is developing other drugs for treatment of blood
clots, sleep disorders and pulmonary arterial hypertension, but
all are in early testing.
(Reporting by Lisa Richwine and Deena Beasley; Editing by Tim
Dobbyn, Dave Zimmerman and Andre Grenon)