Arena Pharmaceuticals is slated to announce much anticipated clinical trial results for the obesity drug lorcaserin Friday morning and be the third biotechnology company this year to make it to the cusp of applying for Food and Drug Administration approval for what could be a lucrative drug.

All three drug makers — San Diego-based Arena and Orexigen Therapeutics, and Bay Area-based Vivus — reported that a significant percentage of patients taking their drugs lost at least 5 percent of their body weight. And they all claim that the safety issues that plagued weight-loss drugs in the past have been solved.

Arena and Vivus say they will apply for FDA approval by the end of the year, and Orexigen plans to by early next year. All this means that the last huge consumer market for a pharmaceutical could be on the verge of being conquered.

“We are talking multiple billions, no question,” said John McCamant, editor of the Bay Area-based Medical Technology Stock Letter. “This is big stuff, literally.”

Nonetheless, McCamant is hesitant about recommending any of the three companies. He’s cautious because he’s convinced that the FDA is terrified of approving the next Fen-phen, the obesity drug that in the 1990s was shown to damage heart valves in patients.

The companies, especially Arena, have had a bumpy ride in the market. The stock sold for around $20 a share at the end of 2006. But earlier this year, after it released its initial round of phase three data, the stock sank to under $2.50 a share. Arena CEO Jack Lief took a lot of heat for overhyping the trial results before they were released, as I detailed in this April story. Lief later acknowledged that he spoke to soon about the trial data.

Arena stock has since recovered somewhat to around $5 a share, but isn’t anywhere close to where it once was. Vivus and Orexigen have faired better. Orexigen has gone from about $5 a share before it announced its phase three trial date in July to nearly $10 today. Shares of Vivus jumped more than 70 percent to nearly $12 after it announced phase three trial results last week.

But McCamant remains cautious. “Why are these three drugs with good phase three data not partnered?” he asked, referring to the lack of interest among large pharmaceutical companies to establish partnerships with the biotechs on the drugs.

The reason, he said, is that despite the good data so far all three drugs have characteristics that will make FDA panels nervous. The Vivus and Orexigen drugs are both combo drugs, which can cause complicated interactions in the body. And lorcaserin is essentially a new version of Fen-phen, he said.

“Vivus is the combination of a speed and an epilepsy drug,” McCamant said. “Doesn’t get me that excited.”

DAVID WASHBURN

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