xy,
i am also disappointed, the street has this to say,
Bear Hunt: However They May Write It,
the News Isn't Good for Cephalon
By Jesse Eisinger
Staff Reporter
11/11/97 2:54 PM ET
The Food and Drug Administration never rejects anything.
Not outright, anyway. Instead, the agency simply suggests
that for something to be approved, there would have to be
more data.
That's worth keeping in mind when trying to read the press
release from Cephalon (CEPH:Nasdaq) and Chiron
(CHIR:Nasdaq) about their Lou Gehrig's disease drug,
Myotrophin. The companies said Tuesday, in a statement
full of Orwellian newspeak, that they have "withdrawn and
resubmitted" their slow-dying application for Myotrophin --
already the subject of two FDA advisory panel meetings and
recipient of one three-month extension. For years the
medical and Wall Street communities have argued about
whether the data from two studies showed safety and
efficacy.
To recap: One study of North American patients, made
public in June1995, showed that the drug worked. A
European study -- announced in November of that year --
initially was touted as backing up the first study. But it
didn't, the vast majority of observers believe. The FDA and
its advisory panels met twice -- once in May 1996 and once
in May 1997 -- and had suggested that the companies
conduct another study.
Cephalon's stock has been closely linked to the prospects
of Myotrophin, and Tuesday it traded off 5/8, or 5.6%, to 10
9/16. The company has another drug pending FDA approval,
called Provigil, which aims to treat narcolepsy. Chiron,
whose other products mitigate the Myotrophin matter, was
off 3/8 to 19.
The companies spun the announcement Tuesday as being
positive. Jim Knighton, a spokesman for Emeryville,
Calif.-based Chiron, hints that "the press release was
somewhat neutral in tone, but in fact there's an interesting
story behind it. It was all done in dialogue with the FDA and
with some fairly positive dialogue with them." FDA officials
did not return a call seeking comment. The agency is closed
today for Veterans Day.
Jason Rubin, Knighton's counterpart at West Chester,
Pa.-based Cephalon, says "the fact is that the FDA
indicated that they needed more time, that they had not
reached a decision as yet." But the agency said that they
didn't have the means of extending the review period, so
they hit on the unusual method of revise and resubmit, he
explains.
So now it's six months of more mulling by the agency. But
is there new data to mull? "No, [the FDA] hasn't asked for
new information," says Rubin. Do the companies plan to do
new trials? "We have no plans for new initiatives at this
point. We are not collecting efficacy data," says Rubin.
The view from some observers on Wall Street and elsewhere
is that the companies are employed in gamesmanship to
avoid the inevitable tacit rejection letter from the FDA. "They
have nothing to resubmit. It's just away to avoid a
non-approvable letter," says one analyst who advises selling
Cephalon short.
"Eminent neurologists from two advisory committee
meetings always have been contending that they had weak
data. It appears to us that this is not a positive thing," says
Sherrie Savett, a lawyer with the New York firm Berger &
Montague. Her firm is one of the lead counsels for ongoing
shareholder lawsuits over Cephalon's potentially misleading
claims about Myotrophin.
But other diehards saw the announcement as positive. "I
think it's a reasonably good thing. It gives them another six
months. I think the FDA would have said no," if they wanted
to reject the application, says Sarah Gordon, a portfolio
manager for Amerindo, which has a long position in
Cephalon. "I wouldn't view it as a slow-death process
because otherwise they would have asked for more data." |
