Orlando, FL 5/11/12 (StreetBeat) -- In a stunning turn of events in less than two years, diet pill maker Arena Pharmaceuticals (Nasdaq: ARNA) won the backing of a panel of government advisers to sell what may be the first new weight-loss treatment in the US in more than a decade. The company’s shares rose 80% in early trading Friday after advisers voted 18-4 in favor of approving Arena’s drug, lorcaserin.
Arena is the second company to win such an endorsement for a diet drug this year after Vivus (Nasdaq: VVUS) was recommended by Food and Drug Administration advisers in February. The FDA delayed a decision on Vivus’ Qnexa, moving a potential approval date later than one set for Arena. If the FDA doesn’t adjust its dates, it will decide on Arena’s drug, lorcaserin, by June 27, and on Vivus’ Qnexa by July 17.
After a pair of overwhelmingly positive panel recommendations from advisers, it’s beginning to look like there may be two near-term approvals for diet drugs. That seemed unthinkable a little more than a year ago after Orexigen Therapeutics (Nasdaq: OREX) followed Arena and Vivus in being rejected by the US agency because of safety concerns.
Shares of Arena rose to $6.59 in morning trading. Vivus was up 4% to $23.57 and Orexigen, which is the farthest away from any potential approval, jumped 7% to $3.57.
Safety has been the killer for these new diet pills. The FDA is very cautious about approving another product that could pose health risks to people taking them. Abbott Laboratories (NYSE: ABT) withdrew its drug Meridia from the market in 2010 after fears of heart attack and stroke. The drug cocktail fen phen was withdrawn from the market in 1997 after evidence of heart valve damage. Those drugs were sold by American Home Products, which was later renamed Wyeth and is now part of Pfizer (NYSE: PFE).
In April, Vivus said the FDA was extending its deadline for an approval ruling on Qnexa because the agency needed more time to review a company plan on mitigating risks for patients. Arena, which is partnered with Japanese drug maker Eisai to sell lorcaserin, has responded to FDA worries about safety, including heart valve problems. However, Arena hasn’t yet discussed a risk plan -- a so-called a risk evaluation and mitigation strategy -- or a post-approval safety study with the FDA, company executives said on a conference call Friday. Eisai would pay 90% of any post-approval safety analysis. No decision has been made yet on a price for the pill.
Arena, Vivus and Orexigen argue that obesity is an epidemic in the US, leading to health problems such as heart disease, diabetes and other conditions.
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