Arena Pharmaceuticals (ARNA) is Getting Closer and Closer to the Green Light

June 20, 2012 4:36 PM EDT
Another day... another hour... another minute... has gone by without Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) announcing a PDUFA date delay for weight loss drug Lorcaserin.

If Arena can avoid a delay this would be big news, since many analysts on the Street still expect Arena Pharmaceuticals will get a 3-6 month PDUFA date delay, although they ultimately expect the drug to be approved. Just look what JPMorgan's analyst said the other day:

"PDUFA date for obesity drug lorcaserin on June 27th. Given the positive 18-4 AdCom vote in May, we expect lorcaserin to ultimately be approved. The question is when. While it is feasible that this could happen by June 27, we are anticipating some sort of delay. A number of panelists at the May AdCom mentioned their desire for a risk evaluation and mitigation strategy (REMS) and a post-approval CV outcomes trial (CVOT). Given that we are not sure how far along the FDA and ARNA are in finalizing either a REMS or a CVOT, we would not be surprised to see either a standard 3-month delay for a major amendment to the NDA (if ARNA submits a proposed REMS pre-PDUFA) or a complete response letter (CRL; if a REMS is not submitted) that could push the next regulatory decision into 1H13. While a positive AdCom vote is not a guarantee for a green light from the FDA (see OREX's Contrave), we assume a 70% probability of eventual approval, which is agnostic to a potential REMS-related delay."

These comments from JPMorgan echoed other analysts.

But as we noted yesterday, rival Vivus, Inc. (NASDAQ: VVUS) announced its PDUFA date delay just 8 days before the originally scheduled PDUFA. Now with just 7 days until the Arena's PDUFA date, while not impossible, it would be unprecedented to announce a delay at this point.

Tick-tock, tick-tock. Every second that goes by means Arena is that much closer to gaining FDA approval and first-mover advantage.

Illustrating the market's increased confidence, shares of Arena Pharmaceuticals closed up 8 percent today to a new 52-week high of $10.50.

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