Arena Weight Loss Drug Approaches Critical Turning Point Next Month

2/11/09Follow @xconomy

Fen-phen was the wonder drug for weight loss in the 1990s, until it was found to damage heart valves and yanked off the market. Now the folks at San Diego-based Arena Pharmaceuticals are eagerly waiting clinical trial results that will show whether they have learned something profitable from that colossal failure.

Arena is developing a drug, lorcaserin, which it says should have the same appetite-suppressing ability of fen-phen, without the nasty side effect. Next month, Arena is expected to lift the veil on a pivotal study of 3,182 patients, which it hopes will show its drug can cause weight loss without any damage to heart valves after two years of follow-up.

This is a critical moment for Arena (NASDAQ: ARNA). The company, founded in 1997, has no products on the market yet and has run up an accumulated deficit of $656 million. The risks are huge: Madison, NJ-based Wyeth has coughed up a staggering $21.1 billion and counting in legal liability settlements to date from the fen-phen debacle. Of course, if Arena’s drug is safe and effective, the returns could also be enormous. About two-thirds of U.S. adults in the U.S. are overweight or obese, which makes them more likely to get a litany of other conditions like heart disease, diabetes, high blood pressure, and arthritis. The cost of all this excess poundage is hard to measure because it is so intertwined with other diseases, but a U.S. Surgeon General’s report pegged it at $117 billion in 2000, or about 9 percent of national health care spending.

So, naturally, any drug that helps people lose more than the FDA’s guideline of 5 percent of body weight, can be taken as a convenient oral pill, and have minimal side effects, is going to be big. The opportunity is probably worth $5 billion to $10 billion a year in sales, according to various analyst reports.

“Everybody here is very excited about it, this is a big event for us,” says Dominic Behan, Arena’s chief scientific officer.

Arena has been trying for years to assure investors that lorcaserin is safe for the heart. The Bloom study, which began in June 2006, has already passed a pair of interim analyses by independent safety monitors, who said it appeared safe after six months, and after a year of follow-up, Arena has said. The safety monitors were looking at high-resolution images taken by echocardiograms.

The study was designed to follow these patients for a full two years, and these results from the echocardiograms will be analyzed next month, Behan says. The company will also say whether the drug hit its all-important goal of producing at least a 5 percent loss of body weight for patients on the drug, compared with those on the placebo, after one year of follow-up, Behan says.

If this data turns out positive, a lot of dominos could fall into place. The company will seek … Next Page »

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