Fate Of Cephalon's Gehrig Disease Drug To Be Settled Soon
By Jesse Eisinger
NEW YORK (Dow Jones)--The Food and Drug Administration took the highly unusual step of scheduling an advisory panel meeting for the Lou Gehrig's disease drug Myotrophin before the new-drug application had been filed.
The announcement was yet another adventure in Myotrophin's odyssey. Perhaps its only definitive aspect was that on June 7, patients, the affected companies and Wall Street will have a much clearer picture of the fate of one of the most closely watched biotech drugs in development.
Cephalon Inc. (CEPH), which developed the drug, said the meeting has the potential to speed the review process. Supporters said that process is likely to be favorable. But bears said it wasn't necessarily positive, speculating instead that the FDA was seeking the political cover of a third-party review. Some suggested the FDA wants support for its January decision to not approve a treatment investigational new-drug application for the amyotrophic lateral sclerosis treatment. FDA officials weren't immediately available.
''In the face of the alternative prospect of waiting till perhaps much later this year'' for a panel meeting to review the NDA, ''this would seem to be a way to advance the review process,'' said Jason Rubin, a spokesman for Cephalon.
Cephalon, along with 50-50 marketing partner Chiron Corp. (CHIR), submitted the treatment IND in October and continues to plan for a new-drug application filing this summer. A treatment IND allows a company to sell a drug at cost to recoup some development and manufacturing costs before it's approved officially.
The positive results of the U.S. trial came out last June, sending Cephalon shares skyrocketing and spurring a biotechnology bull market that continues to this day. However, the second trial, conducted in Europe, and made public after the treatment IND application was submitted, came to be widely regarded as a less robust confirmation of the drug's safety and efficacy. Some analysts now even contend that the results don't confirm the first trial's.
Cephalon's stock climbed steadily after the European study results until January, when news of the FDA's decision on the treatment IND sent its stock plummeting. Today, investors initally reacted favorably, sending shares of both Cephalon and Chiron higher. Cephalon's stock, however, gave up earlier gains.
It wasn't clear what the advisory committee would advise on exactly in its June 7 meeting on Myotrophin. Cephalon's Rubin said that the questions the panel of outside experts will ask haven't been formulated. Essentially, the panel is using the treatment IND pplication as a vehicle to review the data from the two Phase III trials on Myotrophin.
Rubin praised the agency's action as a ''reflection of the FDA's willingness to be creative and flexible.''
David Stone, a longtime Cephalon supporter from Cowen & Co., said, ''It's extremely unlikely that there would be another panel meeting.'' An affirmative panel vote is a mechanism to approve the NDA, bulls said.
Wole Fayemi, of Genesis Merchant Group, said, ''To try to spin the meeting as a negative is ridiculous.'' He said that the scheduling of Myotrophin bumps other drugs in registration off the agenda and that it ''is highly unlikely that the FDA would have made such a move were it not favorably disposed to approving the drug.''
But bearish analysts remained cautious. If the panel is only vested to advise on the treatment IND, Toni Claudio, of Smith Barney Inc., said it was ''so much work for so little.''
One conclusion is that ''clearly the data are not straightforward,'' she added. Other observers said that it boded ill that even after an April meeting between the two companies and the FDA to review all the data on the ALS treatment, the agency still couldn't come to a
decision and wanted to defer to a third party.
ALS patients are a particularly potent political force, and only one treatment is on the market today, analysts said.
''Cephalon seems to be doing everything it can to prevent outright denial,'' said an analyst.
Cephalon, of West Chester, Pa., was up 1/4, or 0.8%, at 31 1/8 on Nasdaq volume of 841,100
shares, compared with average daily volumeof 811,400. Earlier, the stock was as high as 33 1/8.
Chiron, of Emeryville, Calif., was up 2 1/4, or 2.4%, at 95 1/2 on Nasdaq volume of 470,800
shares, compared with average daily volume of 568,800. |
