Arena Pharmaceuticals Inc. (NASDAQ: ARNA) is posing yet one more threat to ambitious biotechs and drug-makers who are targeting the obesity market. Its stock is getting slapped by almost 10% on news that European regulators from teh EMA have put out a list of concerns regarding Belviq, Arena’s weight-loss drug.

Arena is said to have to be required to address the European Union’s concerns both in writing and orally before the same European regulators will consider Belviq for marketing approval in the E.U.  Arena has maintained that it still expects a final approval decision in Europe during the first half of 2013. If you look at the performance today, shareholders have some justified concerns that this approval decision will either not come on time or even the worst case scenario where Belviq is formally denied approval.

Arena said in its SEC filing, “We have received the Day 180 List of Outstanding Issues from the EMA’s Committee for Medicinal Products for Human Use, or CHMP. The issues will need to be addressed before the CHMP can recommend BELVIQ for marketing approval in the EU. The major objections relate to previously identified non-clinical and clinical issues, including tumors in rats, valvulopathy and psychiatric events, and the CHMP requests that we further justify BELVIQ’s overall benefit-risk balance taking these issues into consideration… The CHMP is expected to reach its final opinion on the BELVIQ MAA by Day 210, which we continue to expect in the first half of 2013.”

What is concerning today is that Arena shares are still up substantially from the lows of the last year and the stock was weak on Friday ahead of the news and now even weaker on the news. Shares closed at $10.45 last Thursday, but closed at $9.77 on Friday. Now after the news we have shares down almost 10% at $8.80. Thomson Reuters shows that Arena’s revenues are expected to rise from about $55 million in 2012 up to almost $93.7 million in 2013.

VIVUS Inc. (NASDAQ: VVUS) is up on the news, with its shares up 1.8% at $13.61 against a 52-week range of $9.86 to $31.21. Orexigen Therapeutics, Inc. (NASDAQ: OREX) remains the most speculative of the three obesity drug candidate companies. Its shares are down 1.6% at $5.91 and its market value of $483 million is only about one-third that of VIVUS and is only about one-fourth that of Arena.

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