We first featured Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) on July 1, after the company announced a U.S. marketing deal for its obesity treatment, lorcaserin. Since then, shares have continued their climb, surging almost 20 percent in pre-market trading on Friday after it was announced that an FDA panel voted 9-7 against clearing a competing experimental weight loss drug developed by Vivus, Inc. for marketing in the U.S.

Panelists unanimously agreed the drug helps patients lose pounds, with most reporting more than 10 percent weight loss. But those benefits were outweighed by a slew of safety concerns that cropped up in company trials, including memory lapses, suicidal thoughts, heart palpitations and birth defects.

In contrast, Arena’s weight loss drug, lorcaserin is much safer, but hasn’t shown to shed pounds as much as Vivus’ drug, Qnexa. Lorcaserin is the most advanced candidate in Arena Pharmaceuticals’ pipeline. It is a member of a new class of selective serotonin 2C receptor agonists. The serotonin 2C receptor is expressed in the brain, including the hypothalamus, an area involved in the control of appetite and metabolism. Stimulation of this receptor, the company said, is strongly associated with feeding behavior and satiety. The FDA is expected to act on Arena’s application to begin marketing lorcaserin by October 22.

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Shares of Orexigen Therapeutics (Nasdaq: OREX), whose diet drug Contrave is also up for approval, plummeted 12.6 percent to $4.37. Many industry experts believe that while Contrave is safer than Qnexa, its safety profile may not be as strong as Arena’s lorcaserin. Contrave combines the antidepressant Wellbutrin with a sustained-release version of an opioid blocker used to treat alcohol, drug, and other addictions. The company said a late-stage trial of Contrave in patients with type 2 diabetes showed that after 56 weeks of treatment, overweight or obese patients with the disease lost significantly more weight and achieved greater improvement in glycemic control than those treated with placebo. Orexigen is up for review in January.

ARNA was recently upgraded to Overweight from Neutral by JP Morgan, with a price objective increasing to $6 from $5. Arena Pharmaceuticals, was also downgraded to Market Underperform from Market Perform by Rodman & Renshaw on Friday morning. The R&R analyst put a paltry $1 price target on the stock, citing efficacy and safety concerns that could present “regulatory challenges” for the firm’s Lorcaserin diet drug.

The market research firm Datamonitor referred to obesity in a 2009 report as the “$11 billion market that never was” as it forecast drug sales in the category to reach just $560 million in 2018, far less that the $12.2 billion market opportunity it says is there. The problem, says Datamonitor, is that “current approaches just aren’t good enough to capitalize on this opportunity.”