UPDATE: Bank of America Raises PO to $7 on Arena Pharmaceuticals on Lorcaserin Aproval

Bank of America reiterates its Underperform rating on Arena Pharmaceuticals ARNA but raises its price target from $5 to $7. Bank of America comments, "Following FDA approval of ARNA's obesity drug lorcaserin (trade name Belviq), we raised our NPV to $7/sh (from $5). Our caution on the stock has been due to a combination of delay expectations and a modest market opportunity. This latter concern is unchanged based on the drug's marginal efficacy (3-4% PBO-adjusted weight loss) and various safety concerns. With an EV of $2.3bn versus $2.5bn for VVUS, we view ARNA's current valuation as rich and remain Underperform." ARNA closed at $11.39 on Wednesday.