Cephalon has much value even if myotrophin is dumped...which the company will in probabilty do if the FDA does not approve and request a brand new phase III study, as it would means 2.5 years minimum and is just too expensive.
Next week's Barron's puts a totally negative spin on Cephalon but seems to mirror many sentiments here when they look at the company as being myotrophin only...Cephalon has a wonderful pipeline of products, most prominent being modafinil with initial usage for narcolepsy but with much broader applications......regardless of myotrophin, this is their true "cash cow" for the short term. It is already into phase III with an NDA filed at the beginning of this year, and should be up for approval early 1998. And unlike myotrophin, all studies are positive and without ambiguity which was the case with myotrophin.
But getting back to myotrophin....what nobody has discussed is that the FDA does not have to reverse the decision of the advisory committee to approve myotrophin as the advisory committee was never asked if myotrophin should be approved, only if the studies supported efficacy of myotrophin....and a split decision was reached on this anyway, with three yes votes....there is a lot to uncover about what's going on, but the meeting was not a resounding thumbs down for myotrophin. One very important point which was brought out by both Robertson, Stephens & Co. and Montgomery Securities. Why wasn't the direct and most important question of "Should NDA #20-654 be approved for marketing clearance NOT posed to the panel nor even surface during discussions?"
Montgomery Securities says in their 5/9 report "The FDA and Chiron/Cephalon will now have to engage in non-public discussions to come to final resolution to this key question. We do not know why a definitive vote on approvability was not taken, but note that the FDA will need to make a final regulatory action regarding an NDA approval by August 1997."
Myotrophin may be on its last leg and may be gone, but this is in no ways a done deal.
One third of Cephalon's shares changed hands on Friday....there were many eager to get this at 12 or 13.....Cowen's & Co. downgraded from "strong buy" to "buy", but it's still a buy.
The fate of myotrophin is in the hands of the FDA and congress will ( and in fact is already starting to) come into play here in major way influencing a decision....but to the ALS population, it will ultimately be the FDA who either gives them hope or gives them the finger...Myotrophin works and is a better drug than Rilutek, as simply put, myotrophin promotes quality of life to the ALS patient and Rilutek promotes quantity of life....and there is room for both, just like many diseases, ie AIDS, are treated in multiple drug fashion. |
