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UPDATED: Arena shares up after FDA briefing on lorcaserin

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Arena Pharmaceuticals' ($ARNA) stock jumped this morning after the market got wind of FDA briefing documents that drilled into the risks and benefits of the company's highly watched weight-drug lorcaserin. The agency is urging its advisers to probe the heart and tumor risks associated with the drug at a panel slated for Thursday, yet the briefing document released this morning didn't appear to raise any new red flags that would prevent the committee from backing approval of the experimental treatment.

San Diego-based Arena's stock was up 14.34% to $3.11 per share as of 11:59 a.m. ET as investors bet on the likelihood of a positive panel review.

The company is in the three-way race to get U.S. approval for the first anti-obesity treatment in more than a decade, during which time the obesity rate in America has trended upward. The dry spell in weight-drug approvals underscores the FDA's conservative approach to weighing the risks versus the benefits of the treatments, and unanswered questions about the potential risks of Arena's lorcaserin prompted regulators to issue a complete response on the company's previous application in 2010. 

Safety issues will be discussed thoroughly during this week's panel. The FDA advisers will consider data on rats treated with lorcaserin to judge the risk of tumors associated with the drug, as well as evidence related to risk of heart valve damage from treatment. Lorcaserin is designed to act a receptor in the brain to impact appetite, and other drugs that impact the same receptor nonspecifically--fenfluramine and dexfenfluramine, the infamous fen-fen treatments--have been linked to heart value damage and were pulled from the market more than a decade ago, according to the FDA.

Reviewers are also probing the psychiatric side effects of lorcaserin. Psychiatric disorders were relatively rare in Arena's Phase III studies of the drug but were seen in more patients on lorcaserin than those taking a placebo.

Oddsmakers are watching the FDA advisory committee that will consider lorcaserin this week very closely. The same group recently backed a plan to require assessments of heart safety risks of new weight drugs even when clinical trials don't indicate that such dangers exist, Reuters reported. And J.P. Morgan analyst Cory Kasimov said in a note this morning that four of the 9 voting members of this week's panel were part of the group that rejected Arena's bid for approval in 2010, with three out of the those four returning having voted against giving Arena a nod to sell the drug.

- get the FDA briefing docs here
- see Reuters' article

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Arena shares shine, briefly, as it presents its case for obesity drug
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Arena maps out its one-year plan for lorcaserin

Editor's Note: Updated stock price in article at 11:59 a.m. ET on 5/8/12.