Good News About Arena Pharmaceuticals (ARNA) Weight Loss Drugs

Hapoalim Securities analyst Jon LeCroy reiterated his Buy rating for shares of Arena Pharmaceuticals Inc

, with a price target of $6 per share. LeCroy said that Arena Pharmaceuticals (

) presented two pooled analyses at the 2010 ADA meeting that showed that the company's lorcaserin drug led to weight loss across patient subgroups, as well as improving glycemic and cardiovascular risk parameters. The Hapoalim Securities analyst said that the Food and Drug Administration (FDA) has scheduled advisory panels for all three of the obesity drugs that the company has filed with the FDA and that these could be major catalysts. The The Hapoalim Securities analyst wrote, "We view these panels as a positive catalyst for the individual drugs and the obesity space for three reasons. First, and most importantly, panels imply the FDA is considering approving the drugs (including lorcaserin). If the FDA viewed the efficacy or safety data as clearly warranting not approving the drugs, then there would be no need to host an expert panel. Second, a panel date implies that the FDA expects to be far enough along in the review process to incorporate a panel’s recommendations by (or soon after) the PDUFA. Again, if the FDA had clear questions about safety or efficacy that would require a new trial, it would not need a panel. Finally, we note that panels are typically positive for the drug under review. Experts in a given field usually want new therapies, feel that they are capable of assessing the risk/benefit of a new drug and therefore vote for approval." The analyst went on to say that the major risk facing the stock was that more than two-thirds of his target price for Arena Pharmaceuticals (

) shares, and even the majority of the stock's current price, relied solely on a single product from the company: lorcaserin. Shares of Arena Pharmaceuticals (

) are currently trading near $3.33 each.