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IBDvalueinvestin (99.64)

ARNA a Drug stock that should Rally big ahead of FDA decision.

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September 02, 2010 – Comments (4) | RELATED TICKERS: ARNA , VVUS , OREX

ARNA's Lorcaserin is up on FDA approval decision on 9/16/2010

In July VVUS drug soared up 50% in the final 2 weeks ahead of FDA approval decision.

On Wednesday September 15 the very same panelists that will vote on Lorcaserin are likely to vote to withdraw Meridia from the market because it is associated with heart disease. The very next day they will see Lorcaserin data showing 1 and 2 year efficacy data without valvulopathy/heart disease isses. This data includes very detailed scans of the heart at baseline and months 3-6-12 for the one year data and additionally at months 18 and 24 for the two year data. Lorcaserin is not seen to cause any heart problems, but is shown to provide improvements in secondary risk factors such as blood pressure, glucose levels, heart rate

4 Comments – Post Your Own

#1) On September 02, 2010 at 12:26 PM, davetrevor (< 20) wrote:

I disagree. ARNA rose alongside VVUS in the weeks that led up to the Advisory Committee review -- more than 100% actually. This was partly fueled by optimism that VVUS would be given a favorable vote but also because it announced its partnership with Eisai. On 6/30, ARNA stock was worth $3.07 and rose as high as $8.00 by 7/30. I doubt we'll see it rise higher than 10 - 15% before 9/16 and, if it receives a favorable review, no more than 33%. A big jump or fall is likely when the FDA reviews its drug candidate in October, depending on its final decision to approve or not approve the drug candidate. 

 

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#2) On September 02, 2010 at 2:45 PM, zzlangerhans (99.85) wrote:

I'm with davetrevor here. It's extremely dangerous to jump into a small developmental pharma without detailed background analysis. ARNA is a good way to murder your brokerage account.

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#3) On September 03, 2010 at 10:34 PM, rads2005 (< 20) wrote:

davetrevor is right but for the incorrect reasons.  ARNA did not rise primarily because of VVUS.  It rose in mid July because arguably the most prestigious medical journal, NEJM, published a double blinded placebo controlled trial demonstrating the safety and borderline efficacy of lorcaserin. 

 because of this, the market has already priced in a lot of ARNA's "pre-advisory panel rise."

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#4) On September 06, 2010 at 1:22 PM, clawmann (< 20) wrote:

I expect the stock to move to $8-$9 by close of trading on September 15.  The short interest in ARNA is over 30% and some of those will not want to go short into the panel day, which right now looks as if it will go ARNA's way.  If the advisory panel gives lorcaserin a decidedly positive recommendation (and I believe it will), I am looking for a substantial squeeze September 16 AH and the morning of September 17. It could spike well above $15 during this period.  And I expect renewed short interest midday on the 17th as the up volume ebbs.  Then I expect it to drift down, perhaps to as low as $11-12 until about a week or so before the PDUFA date of October 22.  And then the cycle will repeat leading up to and immediately following FDA approval (which I also believe will happen). Then ARNA will publish the results of its lorcaserin DM (diabetes) study in November or December and that again should push the stock higher if the results are as good as the earlier studies.

I follow this stock, and everything that is written about ARNA and lorcaserin, very closely.  I put the odds of FDA approval somewhere in the 80% range right now.  A decidedly positive panel on the 16th and that goes to 90%.

 

 

 

 

 

            

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