Arena Pharmaceuticals, Inc. (ARNA): U.S. Approved Obesity Drug Derailed in EU

No sales in the U.S. — yet.

No sales in Europe — perhaps ever.

No new data on the pipeline.

Not exactly a good quarter for Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). Shares ended down more than 9% on Friday after reporting earnings Thursday night.

Most, and probably all, of that decline is because of the European decision, or lack thereof. Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) and its marketing partner, Eisai, decided to withdraw its application with the European Medicines Agency to market its obesity drug, Belviq. Withdrawing the application, rather than waiting for a rejection by the EMA, is a pretty common strategy that companies take in Europe.

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) and Eisai gave oral and written arguments, attempting to answer questions posed by the EMA’s Committee for Medicinal Products for Human Use, but to no avail. In the 8-K, the company blamed issues with non-clinical data that couldn’t be resolved before the CHMP made its final opinion as the reason for withdrawing the application.

On the conference call, management wasn’t willing to elaborate further, but we can take a guess at what objections the CHMP might have had. You’ll recall that the Food and Drug Administration gave Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) a laundry list of things that it was worried about: brain cancer in male rats, mammary tumors in female rats, data on potential heart-valve problems, and the risk for abuse.

Which one is the CHMP worried about? Maybe all of them, but my bet would be on mammary tumors, which seemed like the hardest one to explain how it wasn’t relevant to humans. We’ll have to wait until Arena fills in the details after it gets the full report back from CHMP to know for sure.

Not getting its European marketing application approved shouldn’t come as a big shock to Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)’s shareholders. VIVUS, Inc. (NASDAQ:VVUS)‘ obesity drug, Qsymia, was rejected, as was an appeal, because of long-term risks on the cardiovascular and central nervous systems. While the EMA is generally more lenient than the FDA, especially on the efficacy side, the EMA can be more sensitive to potential side effects, since it doesn’t have as robust of a surveillance of post-marketing problems as the FDA does in the United States. Both companies probably have a long road ahead of them if they want to continue pursuing approvals in the EU.