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…” 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. Jon LeCroy of Hapoa lim Securities wrote: “Cancer risk is never good, especially in a product with weak efficacy in a non-life threatening disease.”
Couldn’t have said it better myself!