Investors Smell a Rat Last month, an FDA advisory committee voted 9-to-5 that the risks of the Lorqess diet drug developed by Arena Pharmaceuticals (ARNA) outweigh the benefits. That move came after concerns about valvulopathy and, in particular, links to malignancies in rats at higher doses, which were revealed in FDA briefing documents and caught some people, including Wall Street analysts, by surprise.
The decision caused a stir among investors and a subsequent controversy about whether Arena properly and promptly disclosed the existence of the tumor data (look here). In comments made to Wall Street analysts following the FDA panel vote, CEO Jack Lief insisted the info was handled correctly. An FDA decision is expected later this month.
Now, a petition has begun circulating the Internet ,in which the FDA is being asked to override the panel vote and approve the diet pill. The basic case is that the FDA staff made some fundamental mistakes in their analysis. In the FDA briefing documents, the petition contends, an FDA reviewer made “a highly damaging, but incorrect, statement” that “an excess number of malignant tumors developed in female rats with (Lorqess) at doses within seven-fold of the proposed clinical dose of 10mg BID.” In other words, the FDA analysis overstated the case and confused some of the panelists, who were not experts in such matters.
For instance, the petition argues that of the nine panelists who voted ‘no,’ only two did not cite tumors in rats as their main concern. “This suggests seven panelists that voted no might have voted yes if the FDA had provided a toxicology or a carcinogenic expert as support for any concerns the panelists might have had regarding the relevance to human subjects.It is clear that these panelists were confused or uncertain what the rat data showed, and therefore voted no, not based on scientific evidence but rather the fear of uncertainty.
And then there’s this closing appeal to FDA officials:
“We believe that the long term effects of this event could result in irreparable damage to the biotechnology and pharmaceutical industry as a whole. The dramatic elevation of concern over rat cancer…has prompted class action lawuits against Arena Pharmaceuticals. Clearly these data were adjusted to show significance in cancer occurrence where none existed. If all pharmaceutical and research firms were to release all toxicological results from their pre-clinical or animal studies to the investing community, equity markets in that industry might cease to exist…”
“The pendulum has swung too far at the FDA if they influence Advisory Committees to vote no for a drug that poses very little risk to the public at large, and certainly less than currently available therapies, and where there is a demonstrable clinical benefit in terms of additional weight loss and reduction in cardiovascular risk factors. This is particularly true if the methodology underlying that influence is unscientific and based upon assumptions that are contrary to accepted scientific knowledge.”
The people who initiated the petition do not reveal their identity and instead preferred to be called ‘Concerned Citizen,’ and they argue that by approving the Lorqess pill, the agency would promote public health, saving untold dollars from the nation’s health costs. Beyond such concerns, however, it is unclear whether the petitioners are tied to Arena or are simply investors who were angered by the FDA review.
In any event, their belief that releasing all toxicology data from pre-clinical or animal studies may fatally damage equity markets may be construed as rather sweeping, if not dramatic. Proper disclosure - and proper analysis - remain desirable. The real issue, of course, was whether the rat data was not only disclosed as it should have been, but scrutinized correctly by the FDA staff.
Diet pills, though, are a whole other animal, you’ll pardon the pun. For more than a decade, as you may recall, various diet drugs have been linked to safety issues, most notably the fen-phen weight-loss cocktail, half of which was withdrawn in 1997 over serious links to heart and lung conditions. Given the current environment in which safety is a prime concern, one should not be surprised if the FDA errs on the side of caution. Whether the equity markets then collapse also remains to be seen.
Market Data 
Markets 
AI
