UPDATE: Arena Reports Obesity Drug Success; Data Disappoint
September 18 2009 - 10:12AM
Dow Jones News
Arena Pharmaceuticals Inc. (ARNA) reported the success of its
second large late-stage study of its weight-loss drug lorcaserin,
but the strength of the results disappointed Wall Street when
compared to other drugs being developed.
Arena's stock fell 12% to $4.30 in early trading Friday. The San
Diego drug developer is in a three-way race with Vivus Inc. (VVUS)
and Orexigen Therapeutics Inc. (OREX) to develop a new obesity
treatment, a potential multi-billion dollar market.
Arena believes that the data from the study, called Blossom, met
the Food and Drug Administration's guidance for effectiveness in
order to obtain marketing approval. The data showed a clean
side-effect profile and Arena plans to apply for marketing approval
in December, as well as immediately begin partnering talks with a
large pharmaceutical company.
In a conference call Friday, Arena executives called it a
"game-changer" and projected that the drug will be a preferred
first-line therapy for primary care physicians because of its lack
of side effects.
But the effectiveness of the drug lags that of the others in
development.
Barclays Capital analyst Jim Birchenough said the results were
"at the bottom of the range for late stage candidates, only
approximating regulatory requirements, of questionable clinical
significance and unlikely to support partnership."
Shares of Vivus recently traded up 8.5% to $11.42 and Orexigen
rose 1% to $9.31.
But analyst Bret Holley of Oppenheimer defended the drug's
prospects and believes that lorcaserin's safety will lead it to be
combined with other treatments and bring a "meaningful place in the
obesity armamentarium."
Under FDA guidelines for clinical trials of obesity treatments,
one of two goals must be met. A trial must show that at least 35%
of the drug group lost at least 5% of body weight, but that group
must be approximately double the percentage of patients with
similar weight loss on the placebo. Alternatively, a study can show
that patients had an average weight loss that was at least five
percentage points higher than the placebo group's loss.
Arena's data didn't meet the second benchmark and 47.2% of the
patients on the drug lost at least 5% of their weight, compared to
25% taking the placebo. Although it isn't double, Arena believes
the FDA will accept the success of the trial because the drug arm
is "approximately" double the placebo group.
"We are confident that we meet the benchmark," said Jack Lief,
Arena's chief executive in an interview.
The one-year trial included more than 4,000 patients and found
that those taking the drug twice a day lost 5.9% of their weight on
average, compared to 2.8% on placebo, a difference of 3.1
percentage points.
The data from the Blossom study is similar to that from the
first major trial of lorcaserin, called Bloom, which reported a
more-than-double difference, but still disappointed investors when
it was disclosed in March, sending its stock down 28% the day it
was released.
Vivus reported the strong success of its two late-stage trials
earlier this month and it is the only company of the three that met
both FDA requirements with its data. Orexigen reported the
successful outcome of three major Phase III trials of its drug
Contrave in July.
In the past three months, shares of Vivus are up 85%, shares of
Orexigen have more than doubled and Arena is down 5%, according to
Thursday's closing stock prices.
Because of the market size - the Centers for Disease Control
estimates 34% of U.S. adults are obese - analysts expect there to
be room for multiple drugs to thrive. That market size also means
that the companies will need to cut deals with large pharmaceutical
companies to sell the drugs to primary-care physicians.
The potential side effects of obesity drugs have made large
pharma companies cautious because of past disasters like the former
Wyeth (WYE) drugs, Pondimin and successor Redux, which were part of
the notorious fen-phen combination that was linked to heart-valve
damage and led to billions of dollars in lawsuit settlements.
Arena's drug works in a similar manner to Wyeth's former
treatment, by stimulating a receptor in the brain to make a person
feel full, but both of its major studies have now shown that there
is no increase in such heart-related side effects.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com