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Arena Pharmaceuticals Inc. (ARNA - Snapshot Report) recently received ‘The Day 180 List of Outstanding Issues’ from the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP), in relation to its weight loss drug, Belviq. Arena’s shares were down significantly (almost 10%) on the news.

Arena needs to discuss the issues with the CHMP before the latter gives its final opinion on the marketing approval of Belviq. The issues are both non-clinical and clinical in nature, including tumors in rats, valvulopathy and psychiatric events. The company has been asked to justify Belviq’s overall risk-benefit profile after considering the above issues.

Arena had filed a Marketing Authorization Application (MAA) to the EMA for Belviq in Mar 2012. The company is looking to get the product approved as an adjunct to diet and exercise for weight control in overweight adults. The final opinion from the CHMP regarding Belviq is expected in the first half of this year.

We remind investors that another obesity drug, Vivus Inc.’s (VVUS - Analyst Report) Qsiva, also received a negative opinion from the CHMP in Oct 2012. The CHMP rendered a negative opinion due to concerns over the potential cardiovascular and central nervous system effects associated with the long-term use, teratogenic potential and use by patients for whom Qsiva is not meant.

We expect investor focus to remain on the final opinion of the CHMP on EU approval of Belviq.

We currently have a Zacks Rank #2 (Buy) on the stock. Alkermes (ALKS - Analyst Report) and Medivation Inc. (MDVN - Analyst Report), carrying a Zacks Rank #1 (Strong Buy), currently appear to be more attractive in the pharma space.

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