J&J Would Rather Not Say

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On Friday night, after the markets closed, Johnson & Johnson (NYSE: JNJ) issued a press release announcing that the Food and Drug Administration had sent the company a Complete Response Letter for its epilepsy drug candidate, carisbamate.

Should shareholders be worried? It's hard to tell. In typical pharma fashion -- yeah, I'm looking at you, GlaxoSmithKline (NYSE: GSK) -- Johnson & Johnson gave little information about why the FDA didn't approve the drug.

If you read between the lines, this could be bad news for Johnson & Johnson. When the FDA turned down the marketing application for its anticoagulant Xarelto in May, Johnson & Johnson didn't say exactly what additional information the FDA wanted, but did mention that no additional clinical trials were needed. Friday's press release about carisbamate had no such clause, leading me to wonder whether the FDA will require further testing.

It's a stretch, but what else do investors have to go on? Especially when J&J's press release includes useless comments like this one: "The company is currently evaluating the FDA's complete response letter, and will respond to the agency's questions as quickly as possible."

We should hope so.

Carisbamate failed one of its clinical trials, which tested its ability to lower the frequency of seizure when added to other epilepsy drugs. The class includes Abbott Labs' (NYSE: ABT) Depakene, Cephalon's (Nasdaq: CEPH) Gabitril, and Pfizer's (NYSE: PFE) Lyrica. Johnson & Johnson thinks the type of drug may have an effect on the efficacy of carisbamate. But it's possible that the FDA may not buy that explanation, and wants a trial to prove it.

With U.S. sales of its blockbuster epilepsy drug, Topamax, down 86% last quarter after Topamax started facing generic competition, Johnson & Johnson could really use an approval to replace it. Unfortunately, the FDA may try to squeeze a little more data out of Johnson & Johnson, and responding "as quickly as possible" may take some time.