Analysts take on obesity drugs turns grim after lorcaserin CRL

Shares of Arena Pharmaceuticals (ARNA) actually went up yesterday after CEO Jack Lief conducted a distinctly bullish review of the FDA's Complete Response Letter for lorcaserin. But some analysts are adopting a distinctly bleak outlook on the future of new weight loss therapies.

Rodman & Renshaw analyst Elemer Piros is grim about the prospects for obesity drugs over all, noting to the Wall Street Journal that the FDA wants a side effect profile on these drugs that is equivalent to diet and exercise. The bottom line: "This whole space is pretty much dead."

The FDA's official response to Arena should prove chilling for Orexigen and Vivus, which are mounting their own uphill campaigns to gain an approval on the first new weight drug in more than a decade. Vivus, which was handed its own 'no' vote from an FDA panel recently, is next up, with a PDUFA date that lands on Thursday.

TheStreet's Adam Feuerstein talked it over with JMP Securities analyst Jason Butler and reviewed the likely scenarios, which are expected to fall somewhere between completely unapprovable and a green light for immediate launch. While they don't expect to see the agency ask for a heart safety study before an approval--a huge and expensive holdup--the real key may be whether the developer will have to gather pregnancy risk data before or after an approval.

Writes Feuerstein: "Vivus blows up if FDA asks for pregnancy risk data prior to approval."

- read the story from the Wall Street Journal
- and here's TheStreet's report