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Arena Pharmaceuticals, Inc. (ARNA - Snapshot Report) recently announced that the European Medicines Agency (EMA) accepted its marketing authorization application (MAA) for lorcaserin for review. The application was filed earlier in the month. The news had a positive impact on Arena Pharma’s shares.

We note that  Arena Pharma and partner Eisai Inc. are looking to get lorcaserin approved for weight management, including weight loss and its maintenance, in obese (Body Mass Index, or BMI, >30) or overweight (BMI >27) patients suffering from at least one weight-related co-morbid condition.

Apart from announcing that the EMA has started reviewing the marketing application in the EU, Arena Pharma also announced some progress regarding the approval process of lorcaserin in the US.  An FDA advisory panel meeting regarding lorcaserin has been scheduled for May 10, 2012.

Bumpy US approval Path…..

The US approval path for lorcaserin has been anything but smooth. In December 2009, Arena Pharma had submitted the new drug application (NDA) to the FDA to get lorcaserin approved for weight management, including weight loss and its maintenance, in obese patients suffering from at least one weight-related co-morbid condition.

The US agency, after reviewing the NDA, refused to approve lorcaserin in October 2010 citing tumor-related safety concerns. The FDA, while issuing the complete response letter (CRL), also stated that the efficacy of the drug in non type II diabetes obese patients was found to be marginal. The regulatory body also asked Arena Pharma to submit the final study report of the BLOOM-DM (Behavioral modification and Lorcaserin for Overweight and Obesity Management in Diabetes Mellitus) study which evaluated lorcaserin for weight loss in patients suffering from type II diabetes.

Arena Pharma submitted the requested additional data in its response to the CRL. The FDA accepted the re-submitted NDA. A decision from the US regulatory body is expected in the second quarter of 2012 (target date: June 27, 2012). Prior to that, the FDA’s advisory panel will meet to review the NDA.

Our Take & Recommendation

We expect investor focus to remain on the fate of lorcaserin going forward. We prefer to remain on the sidelines, with a Neutral view on Arena Pharma, till more visibility is obtained on lorcaserin’s regulatory status. The stock carries a Zacks #2 Rank (Buy rating) in the short run. Other companies that are working on gaining approval for their obesity candidates include Orexigen Therapeutics, Inc. (OREX - Analyst Report) and Vivus Inc. (VVUS - Analyst Report).

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