A CRL (complete response letter) was issued to Arena Pharmaceuticals by the FDA this morning regarding the biotech's experimental medicine, Lorcaserin, citing the following concerns:
1) Tumor-related incidents in preclinical female rat studies
2) Marginal efficacy in obese patients
3) Lack of data to support the irrelevancy of the correlation between increased tumor incidents and Lorcaserin in human patients
4) Incomplete assessment of Lorcaserin's benefit-risk profile
Arena press release
Coincidental jump in Arena's stock
As predicted, the FDA was slightly delayed in their drug assessment announcement of Arena's weight management drug, Lorcaserin. Coupled with a letter sent from FDA to the firm addressing shareholders' complaints about the absence of toxicologists in the advisory panel, which could have represented an unbalanced and biased review of Locaserin during the panel meeting, it almost seemed as though there might have been a chance that the drug could gain an approval despite the unfavorable recommendation forwarded to the FDA. The coincidence boosted ARNA as high as 26% at one point before closing at +11.64%. This was a completely unexpected event and should not be treated as a lost opportunity! Watch what happens when the market opens on Monday. It is very likely that the stock would suffer a 30-50% cut as soon as trading opens.
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