(By Rich Bieglmeier) Arena Pharmaceuticals, Inc. (ARNA) obesity drug, now called Belviq (formerly known as lorcaserin) has been Okayed by an 18-4 vote. It is the first new obesity drug to hit the market in 13 years. The stock has been halted since 12:39 pm Eastern, with a pre-halt trade price of $8.73.
According to the company's press release, "The FDA has recommended that BELVIQ be classified by the U.S. Drug Enforcement Administration (DEA) as a scheduled drug. The DEA will review the FDA's recommendation and determine the final scheduling designation. Once the DEA has provided the final scheduling designation, Eisai will announce when BELVIQ will be available to patients and physicians in the United States."
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With 22% of the ARNA's float – stock available for trading – sold short, the approval news is likely to trigger a massive short squeeze. There will be some folks with sore bottoms once the stock resumes trading.
Where the price goes is anybody's guess, but investors are likely to have a new blockbuster biotech to monitor going forward. We know all about the counting your chickens stuff, but congratulations to those who picked up ARNA following our money-flow, Getting Fat on Obesity Stock article on May 15.
UPDATE: Arena has
opened for trading. It's been as high as $13.50. Stay tuned as the stock is
sure to be volatile.