Arena Pharmaceuticals (NASDAQ:ARNA): BLOSSOM Results Disappointing - Barclays

Barclays is the first one commenting on BLOSSOM results reported this morning by Arena Pharmaceuticals (NASDAQ:ARNA):

We are maintaining our 2-Equal Weight rating on ARNA following release of BLOSSOM results for lorcaserin in obesity. While the study met its 1ary endpoint results were disappointing relative to prior BLOOM results, well below the standard set by Vivus's Qnexa, at the bottom of the range for late stage candidates, only approximating regulatory requirements, of questionable clinical significance and unlikely to support partnership. We expect shares to pull back on these results

ARNA reported results today from the BLOSSOM study of lorcaserin in obesity. Results of the 4088 patient study suggest placebo adjusted weightloss of only 3.1% (5.9% vs 2.8%), below FDA guidance of 5% with categorical 5% weightloss in 47.2% vs 25% for placebo, in the range of regulatory guidance for approximate doubling. Results are below the 8% placebo adjusted weightloss with competitor Qnexa and no better than intensive lifestyle modification in a recent Contrave study

While topline safety appears relatively clean with no difference in valvulopathy and no apparent CNS AEs we would note a higher discontinuation rate for AEs at 7.2% vs 4.6%. We believe results are disappointing relative to expectations

Action: When you are developing a drug in a area with so many competitors then so-so results are not good enough. Despite meeting the primary endpoint these results should be considered as a disappointment and expect the stock to react accordingly today.

It is a short above $4 and I expect it to fall close to $3 level today.