UPDATED: Arena Pharma's weight drug wins the day, shares soar

Arena Pharmaceuticals' closely watched diet pill won over FDA advisers today. A committee of non-agency advisers backed approval of the weight drug, lorcaserin, which went down in flames when last in front of the same panel in 2010.

The turnaround for the program marks a victory for San Diego-based Arena ($ARNA) and its partner for U.S. marketing, Eisai. The FDA will consider the panel's 18-4 vote in favor of approval in the agency's decision on whether to green-light the drug. As Bloomberg notes, the agency hasn't approved a weight loss drug in 13 years. Vivus ($VVUS) and Orexigen ($OREX) are also in the hunt to advance new drugs to combat obesity, which affects more than a third of the U.S. population.

The FDA has taken a tough stance on the safety of obesity meds, and Arena's lorcaserin has been no exception. Arena faced numerous questions about potential side effects of the drug such as malignancies, heart valve damage and psychological problems. And critics of the program point out the modest efficacy data on the drug. Yet the company made a compelling enough case during Thursday's advisory committee session in Silver Spring, MD, to come away with a win.

After the panel meeting closed, shares of Arena skyrocketed. The stock more than doubled at points early in the morning and traded at $7.16, up from the May 9 close of $3.66 as of 8:55 a.m. ET.

Yet worries linger about the effects of the drug on the heart. An FDA briefing and panel members were satisfied with data Arena provided to show that the risk of cancer to patients who take lorcaserin appears remote. However, there was less certainty about the long-term impact of the drug on patients' hearts, Bloomberg reported. And any unresolved safety issues threaten the timely approval of the drug.  

"We expect lorcaserin to be approved; now the question is when," J.P. Morgan analyst Cory Kasimov said in a note to investors this morning. "It's now certainly feasible that the drug is approved at that time. However, a number of panelists mentioned their desire for a Risk Evaluation and Mitigation Strategy and a post-approval [cardiovascular] outcomes trial."

The FDA has set an action date of June 27 for its decision on approval of lorcaserin.

- see Bloomberg's article
- here's more from Reuters
- read the AP story on CBS

Editor's note: Story is updated with analyst insights and additional details from the FDA panel on Thursday.