SAN DIEGO, Sept. 30, 2010 (GLOBE NEWSWIRE) -- A private investor and former shareholder of Arena Pharmaceuticals, Inc. ("Arena") (Nasdaq:ARNA) has filed a civil action for Fraud, Negligent Misrepresentation, Securities Fraud and violations of the California Business and Professions Codes 17200 (Unfair Business Practices) and 17500 (False Advertising) against the Company and several of its officers, namely, Arena President and CEO, Jack Lief; CFO and Vice-President of Finance, Robert Hoffman; Chief Scientific Officer and Senior Vice-President, Dominic Behan; Chief Medical Officer and Vice-President, William Shanahan; and Vice-President of Clinical Development, Christy Anderson. The Complaint was filed by George Sharp in the San Diego County Division of California Superior Court (Case No. 37-2010-00101086-CU-FR-CTL) on September 27, 2010.
In his complaint, Mr. Sharp states that the Defendants deliberately deceived him by issuing false and misleading press releases indicating that Arena's weight-loss drug, Lorcaserin, was effective, tolerable, and efficacious, in line with United States Food and Drug Administration ("FDA") guidelines and qualifications. Mr. Sharp further alleges that while the Defendants were touting Lorcaserin, they deliberately and admittedly withheld data from the public regarding the relationship of the drug to cancer in rats. Mr. Sharp accuses the Defendants of committing this premeditated omission in order to maintain Arena's artificially high share price.
On September 14, 2010, the FDA issued a briefing document in which the agency questioned both the safety and efficacy of Lorcaserin. A one day decline of 39.7% in the share price of Arena stock followed the release of this document. Then, on September 16, 2010, the FDA advisory panel voted 9 to 5 against the approval of Lorcaserin, expressing concerns with the results of previously non-public rat carcinogenicity studies (occurrences of cancer) and the minimal weight-loss affected by Lorcaserin. A one day decline of 46.8% in the share price of Arena stock followed the FDA advisory panel vote.
Mr. Sharp states that he was damaged because he purchased Arena stock and call options over a period of several weeks before the FDA Panel vote, based on the Defendants' false, misleading, or deficient proclamations.
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CONTACT: Clipper Corporate Partners, Inc. George Sharp (310) 498-4455 george@clippercp.com