FDA move widens concern over Cephalon's Myotrophin
Monday April 6, 2:48 pm Eastern Time
NEW YORK, April 6 (Reuters) - The cancellation of a federal advisory panel meeting on Cephalon Inc's (CEPH - news) drug for Lou Gehrig's disease, Myotrophin, heightened concerns over the controversial compound and sparked a selloff in Cephalon shares on Monday, analysts said.
Cephalon was down 2-3/4, or 18 percent, to 12-5/8 at midday.
The West Chester, Pa., company said earlier today that the U.S. Food and Drug Administration had cancelled an April 9 meeting of its Peripheral and Central Nervous System Drugs Advisory Committee.
Chiron Corp. (CHIR - news) has a contract to manufacture and co-market the nerve growth drug and would share profits equally with Cephalon. Shares of Chiron, a far larger company based in Emeryville, Calif., slumped 9/16 to 21.
''We have relatively few facts to go by at this point,'' Cephalon spokesman Jason Rubin told Reuters. He said the FDA had given no specific reasons for cancelling the meeting and had not yet suggested rescheduling the session.
''We're disappointed not to be able to bring this thing to resolution this week,'' Rubin said.
''But we are continuing to press the case for approval of Myotrophin and are anxious to get some guidance from the FDA what the path forward will be,'' Rubin added.
Asked what the FDA cancellation might signify, Rubin said, ''I don't think we have enough information, so I can't speculate what this means for the drug.''
Some analysts said the FDA move cast a darker shadow over Myotrophin. They noted the FDA panel in May 1997 voted 6-3 against recommending approval of the drug after one clinical trial failed to show clear efficacy against the muscle-wasting disease formally known as amyotrophic lateral sclerosis (ALS).
The FDA panel urged Cephalon and Chiron to conduct another major trial, but the companies decided against doing so.
Instead, in November 1997, they withdrew and immediately resubmitted to the FDA their New Drug Application to market the drug, giving the agency more time to analyze clinical data before making its final decision.
''At this point, I'm fairly confident Cephalon doesn't have a strong enough case for getting the drug approved. I think it's problematic that after two years of reviewing it, the FDA still needs more time,'' said CIBC Oppenheimer analyst Matt Geller.
''I don't think it does much for ALS patients, and this is clear from the data,'' Geller added.
Mehta Partners analyst Edmund Debler said he believed the FDA cancellation signaled that the agency is leaning against approval.
''My read on it is that even though Cephalon has been aggressively pushing, pushing, pushing, the FDA just doesn't want to approve this drug,'' Debler said.
''The companies have been playing a hard, aggressive game, playing up the outcry from patients to let them try this drug. But I'm impressed the agency has taken the stance of refusing to be pushed around by the companies or the patient population,'' he said.
Debler said Cephalon had focused too heavily on its lead drug Myotrophin and had failed to produce other significant compounds from its research and development.
''Cephalon has no other significant products from its research pipeline and that's another problem,'' said Debler, whose firm provides research on biotech and large-capitalization drug companies. |
