A Big Rat? Arena Pharma’s Diet Pill And Tumors
8 CommentsBy Ed Silverman // September 17th, 2010 // 10:53 am
No one at Arena Pharmaceuticals could accuse ceo Jack Lief of being a rat. In a conference call yesterday with analysts after an FDA panel rejected the drugmaker’s Lorqess diet pill due to safety concerns, Lief acknowledged that different forms of cancer had been seen in rats treated with high doses. But he stressed that “when we learned of the data, we promptly discussed it with the FDA.”
But then Cowen analyst Phil Nadeau asked if the info was ever made available to the public or was the FDA briefing document released this week the first time investors might have learned of this finding. Lief replied by saying “…we believe that (Lorqess) does not pose a cancer risk to humans at the recommended therapeutic dose…There is an immense amount of data generated in drug development. We did not, and still do not believe that the data’s relevant to humans and, as such, did not believe it was material to investors.”
Well, when the rat data was disclosed, investors thought otherwise. Arena stock fell as much as 42 percent after the briefing documents were posted by the FDA. As Jon LeCroy of Hapoalim Securities wrote in an investor note the next morning: “The fact that the FDA is questioning the efficacy and heart safety of Lorqess was not surprising, but the fact that malignancies of multiple types were seen in rats treated with high doses of the drug was quite surprising to us…Cancer risk is never good, especially in a product with weak efficacy in a non-life threatening disease.”
Of course, if you are or were an Arena investor the other day when the stock plunged, you would likely have preferred that the drugmaker had disclosed this data previously. Unless, you shorted the stock. Beyond self interest, though, what do you think? In principle, is the sort of information that should be disclosed?
Should Arena Have Disclosed The Rat Data To Investors?
- Yes (93%, 199 Votes)
- No (7%, 16 Votes)
Total Voters: 215
Loading ...Hat tip to Adam Feuerstein
Ken Kramer
Anti-obesity drugs are being held to incredibly high standards for efficacy and safety. BRAVO. It is about time the FDA takes such a proactive stance for a class of drugs that will be used by a high number of patients for a very long time. It will serve no one if we are sitting here 12-18 months after product launch talking about post-approval safety issues and the possibility of withdrawal. By then, so many will be “dependent” on these drugs that the patient advocacy roar could be deafening. We need to get this one right, and if slow and steady wins the race, so be it.
Ken Kramer
One last point. I disagree with Mr. LeCroy and his assessment that obesity is NOT a life-threatening disease. The number of medical complications related to people being overweight and obese is well-documented, Not to mention the incredible costs of healthcare related to these comorbidities. Obesity is a disease, like many others, and not a lifestyle choice like so many still believe.
lex smith
Full disclosure, whether good or bad, is required to make an informed decision prior to purchasing any equity. As a part of his or her due diligence, everything bit of information is “material” to an investor who may plump down thousands of dollar believing the success of a company’s product solely based on whatever it desires to disseminate publicly.
The public has absolutely no other access to information other than publicly provided by a company (e.g., prospectus).
Subjective meaning of “materiality” aside, Arena as a public company is mandated under SEC rules to make full disclosure, whether positive or negative, because anything can impact the investor’s decision to purchase its stock and therefore all information is “material.”
Caveat emptor applies in any sale but only after full disclosure of all relevant information. And, the information Arena withheld was certainly relevant and material to the FDA with respect to Lorqess.
lakedweller508
Many investors were aware of the rat issue as it was made public in the BLOSSOM clinical trial enrollment documents dated 3.13.08 which remain available online - pg. 5:
http://www.weightcenter.org/images/BLOSSOM-ICF-AbbrText-031308.pdf
Vivus investors also mentioned it many times on an Arena public message board to argue that like Quenexa, Lorqess also had serious side effects. But it wasn’t considered significant particularly because the focus had been on ruling out CV issues.
It only became a concern when the FDA combined the benign fibroadenomas with the malignant adenocarcinomas to reach statistical significance. Noted by Daniel, UCLA MD:
“Only the very high dose - 82x - reached statistical significance for adenocarcinoma.
In order to make it look that adenocarcinoma had reached statistical significance in all three doses - LD, MD, HD - they combined the two types of tumors (which are as different as apples and oranges) to reach this statistical significance.
Thus they concluded that tumors caused by lorcaserin reached SS in all doses - cleverly concealing the fact that the only tumor to be concerned about - adenoca - was SS only in the extremely high dose group.
Their premise for concern is based on the fact that women are already at risk for breast cancer and therefore we should be worried about the increase in tumors at all three doses. This is far from the truth.”
From the Journal of Toxicology and Environmental Health -Volume 43, Issue 2 October 1994 , pages 169 - 182 :
“Female rats, particularly of this strain (Sprague-Dawley rats), commonly develop spontaneous mammary tumors as part of the aging process, with incidence in aged control Sprague-Dawley rats ranging from 20.0 to 43.3% for fibroadenomas and 6.7 to 30.0% for adenocarcinomas”
During the FDA advisory panel discussion, one of the female doctors asked if she could vote yes conditioned upon getting follow-up, longer term data and the tumor issue. This is when a person, apparently from the FDA said, “Remember, your name’s going to be on it.” The rest is history.
So a valuable, much needed drug wasn’t voted for approval because of skewed stats provided by the FDA which were taken as fact by the media and Wall St., and ultimately caused a good deal of confusion to the panel members. Seeing this was one of the 6 questions to be voted on, it would seem logical to have had an oncologist on the panel, but that was not the case.
Obesity not only increases the risk of cancer, but also makes early detection more difficult. Further, losing weight and keeping it off significantly reduces the risk of breast cancer particularly for post-menopausal women. (See the Nurses Study/Boston). The risk/reward of diet drugs remains relative. The better they work, the more side effects they have. That is why Lorqess was the best hope for addressing the obesity epidemic in this country. It is modestly effective with modest side effects.
Let’s hope the FDA does the right thing in October.
lakedweller508
*Qnexa
JQ
lakedweller:
“In order to make it look that adenocarcinoma had reached statistical significance in all three doses - LD, MD, HD - they combined the two types of tumors (which are as different as apples and oranges) to reach this statistical significance.”
This is not true. Read FDA briefing document yourself, I quote from the document directly:
“Mammary tumors in rats consisted of fibroadenoma and adenocarcioma. Statistically, the increased incidence of adenocarcinoma was significant only in high dose females. When combined with fibroadenoma, statistical significance is achieved at all doses in females and at mid- and high doses for males (Table 6). A safety margin, defined by a non-tumorigenic dose, was not identified in females because an increased incidence of fibroadenoma was observed at the low dose, or ~7x the clinical dose.”
Gary
Obesity is a disease often predicated by genetic factors that lead to a battle that many simply cannot fight and consequentially give up. I say that many of the arguements are always looking for the root cause as if there was only one. Every hardship that we encounter is 99% of the time the result of a recipe of factors. Not just one. When an obese person reaches a weight that hinders their ability, the inevitable factore are systematic and a drug may be the only way a person can get ahead of the game. If it were possible to recognize when a person was 5 lbs. overweight, that in 5 years that could multiply 10 fold, we would all be geniuses and no drug would be needed. It is a disease and 2/3 of America suffers from it.
Brian
As a former Investment Banker I have a long history of reading SEC documents, red herrings, final prospectus, etc. etc. On ARNA I read the complete SEC filings of ARNA before putting my dollars to work with shares in ARNA. Stocks below $5 (used to be penny stocks) are inherently risky BUT I could see promise in this new drug. MY FOCUS was on heart valve issues when completing my DUE DILIGENCE. If I had read/heard of ANY CANCER issues I would have backed away and moved on to other investments. I would not be sitting today with $1000’s lost because issues were not disclosed. We used to call it a CHINESE WALL, but always the mantra was DISCLOSE, DISCLOSE and when in doubt, DISCLOSE. Wish Jack would have focused on his responsibilities versus his options.