It proved to be second time lucky for
Arena Pharmaceuticals, Inc.
) and Japanese entity Eisai Inc. with the companies finally gaining
US Food and Drug Administration (FDA) approval for their weight
loss drug, Belviq (lorcaserin HCl).
ARENA PHARMA (ARNA): Free Stock Analysis Report
OREXIGEN THERAP (OREX): Free Stock Analysis
VIVUS INC (VVUS): Free Stock Analysis Report
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The FDA cleared Belviq as an adjunct to a healthy diet (low on
calories) and increased physical activity for chronic weight
management in obese (Body Mass Index, or BMI, >30) or overweight
(BMI >27) adults suffering from at least one weight-related
co-morbid condition. The move marks the first FDA approval for a
weight-loss drug in 13 years.
While clearing the drug, whose safety and efficacy while being
coadministered with other weight loss products and the effect on
cardiovascular morbidity and mortality are yet to be established,
the FDA recommended Arena's obesity drug to be classified by the US
Drug Enforcement Administration (DEA) as a scheduled drug.
We note that there are five classes of drug schedules. While drugs
with the greatest potential for abuse are placed in the first
schedule, drugs with the least abuse potential are in the fifth
schedule. Belviq has been requested to be put in the fourth
Eisai, who will market Belviq in the US, will decide on the drug's
launch only after the DEA gives its verdict on the matter. Belviq
will target the highly lucrative obesity market following its
Following the FDA approval, the partners will conduct
post-marketing studies to evaluate the safety and efficacy of
Belviq for weight management in the pediatric population.
Post-marketing studies will also be conducted to evaluate the
effect of long-term Belviq therapy in overweight and obese patients
suffering from cardiovascular disease or who are exposed to
cardiovascular risk factors. The companies intend to work with the
FDA on the finalization of the post-marketing study designs.
Success tastes sweet for Arena
We note that success with Belviq did not come straightaway for
Arena. The company did not taste success in its first attempt to
gain FDA approval for Belviq. The US regulatory body issued a
complete response letter (CRL) to the companies in October 2010 in
response to the new drug application (NDA) submitted in December
2009 citing tumor-related safety concerns. The FDA also asked for
additional data. The FDA accepted the re-submitted NDA and assigned
a target date of June 27, 2012. The FDA approved the drug on that
date following a positive recommendation by its advisory panel in
We note that Belviq is under review in the EU. Approval in the EU
would further boost the sales potential of the drug.
Neutral on Arena
Even though the FDA approval of Belviq is a huge boost for Arena,
we prefer to remain on the sidelines with a neutral view on the
stock until visibility is obtained on the drug's DEA status. Our
long-term Neutral recommendation is in line with the Zacks #3 Rank
(Hold rating) carried by the company in the short run. Other
companies that are working on gaining approval for their obesity
Orexigen Therapeutics, Inc.
). The FDA is expected to decide on Vivus' obesity candidate Qnexa
shortly (target date: July 17).