Is ARNA finally getting its day in the sun?

http://news.yahoo.com/s/nm/20090606/hl_nm/us_arena_obesity;_ylt=Agl0ZWk9m9Vdus.M9J3KpqXVJRIF;_ylu=X3oDMTJsNWlvcTc3BGFzc2V0A25tLzIwMDkwNjA2L3VzX2FyZW5hX29iZXNpdHkEcG9zAzEEc2VjA3luX2FydGljbGVfc3VtbWFyeV9saXN0BHNsawNhcmVuYWNvbXBsaWE-

I believe I got it right on ARNA, even if Wall Street analysts misinterpreted the Bloom trials top-line data on March 30, condemning the efficacy of Lorcaserin as "disappointing". There was agreement on the safety profile and tolerability of Lorcaserin, but the media focused on the 5% mean weight loss above placebo criterion. What they missed were the FDA guidelines on categorical weight loss of 5% and 10%, which Lorcaserin exceeded. The minimum 5% categorical weight loss also had to be above 35%, which was it was at 47.5%, which meant almost half the subjects experienced at least 5% weight loss on Lorcaserin, whether they dropped out of the trial or not. Upon further data analysis, almost 67% of subjects on Lorcaerin who didn't drop out of the trials lost 5% or more body weight.

The primary end points of weight loss were met, as were secondary end points like improvements in blood pressure, cholesterol, triglycerides, lipids, glucose levels and quality of life.

The number of overweight Americans is approaching 200 million, with 100 million of those obese, so the market potential for weight management drugs is huge. Phen-fen was a blockbuster, but due to heart valve problems and countless lawsuits later, it was recalled. Lorcaserin's tolerability and safety profile was favorable, with comparable rates of depression and cardiac valvulopathy in the placebo group. The probability of FDA approval in 2010 has increased with the latest news.

Blossom results will be announced in September, and the Bloom-DM trial for diabetics will also wind up soon. Expect a partnership agreement with a big pharma later this year, which should ease cash flow concerns and clear the path to an NDA submission in Q4 2009, and PDUFA in Q4 2010.

Disclaimer: Do your due diligence. Investing is risky and you can lose most or all of your investment.

Disclosure: I am long ARNA shares and also write covered calls.