On Thursday, an advisory panel to the U.S. Food and Drug Administration voted 9-5 against recommending approval of the drug, lorcaserin, saying potential risks outweighed the modest weight loss seen.

Among other safety concerns noted by panelists, rats given high doses of the drug developed tumors. The panelists were unsure whether the drug could cause cancer in humans.

News of the cancer finding emerged for the first time on Tuesday, in briefing documents prepared by FDA reviewers ahead of Thursday's panel discussion, taking Wall Street by surprise.

"I was totally blindsided," said Summer Street Research analyst Carol Werther.

Arena's shares fell 45 percent on the tumor news, which lowered expectations the drug would be approved. They fell another 39 percent in after-hours trade on Thursday to $2.30.

Drug companies are not necessarily required to disclose preclinical data to shareholders, but analysts said that in general, big surprises related to safety or efficacy rarely emerge late in the day, and in this case some shareholders felt misled.

"The concern that people have is, when did management know about this and what was the extent of the signal that was observed?" said one investor who asked to remain anonymous due to the sensitivity of the situation. "I think lawyers will have a field day with this. I suspect there will be some subpoenas and a lot of pointed questions from attorneys and investors."

In response to a question from Reuters asking when the company first learned of the cancer signal in rats, a representative of Arena said in an email, "I suggest that you listen to tomorrow's conference call."

The call was scheduled to take place at 7 a.m. ET on Friday.

An indication of what may lie in store for Arena can perhaps be gleaned from the tale of Sanofi-Aventis SA's obesity drug Acomplia.

In June 2007, the FDA released documents that showed that people who took the drug in clinical trials were more likely to report suicidal thoughts or actions, prompting an advisory panel to recommend that the agency reject the pill.

Sanofi investors subsequently sued the company, claiming it kept them in the dark about the risk of suicidal thoughts or actions, knowing that such information was material.

In July 2010, a U.S. federal judge in New York reinstated the suit, which had earlier been rejected.

In its presentation to the panel on Thursday, Arena challenged concerns about the rat tumors, saying the findings did not apply to people because the tumors resulted from high doses or biological mechanisms specific only to rodents.

"Lorcaserin does not pose a cancer risk to humans at the recommended therapeutic doses," said Dr. Gary Williams, a public health professor at New York Medical College who spoke for Arena.

The FDA panel, which consists of a group of outside experts, was not convinced, and now Arena will have to explain to investors when it knew about the rat data and why it did not feel it necessary to share the information with Wall Street.

"A failure to disclose material information that would affect either an FDA approval or an investment in a publicly traded company is something that would be taken seriously, reviewed and potentially expose the company to liability," said Richard Cutler, a former federal prosecutor.

Investors' pain is compounded by the fact that the drug had been presented by some analysts as most likely being the safest of three obesity drugs under review by the FDA, and many had predicted the drug would be approved. Arena's shares had risen 123 percent in the 10 weeks running up to the panel meeting.

"There is a compact between a company and its shareholders that says if you are going to raise funds you should make sure people are aware of such things, even if there is only a remote possibility of a problem," said Steve Brozak, an analyst at WBB Securities.

But Jason Zhang, an analyst at BMO Capital Markets, said companies usually do not disclose preclinical information and that since Arena does not see the rat data as a real signal, it did not feel a necessity to disclose the data.