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J&J Rejected, but Only a Little

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"Take two of these and call me in the morning," will have to remain the saying for Johnson & Johnson's (NYSE: JNJ  ) Prezista for the time being. The pharma giant announced Tuesday that the Food and Drug Administration rejected its once-daily pill to treat HIV.

Literally. The pill itself is the only thing that got rejected.

Prezista is still on the market, and Johnson & Johnson can still market it as a once-daily treatment for HIV. The company just can't sell an 800-mg version of the drug it developed. Patients who want to take Prezista as a once-daily drug will have to continue taking two 400-mg pills.

What's wrong with the 800-mg pill? Johnson & Johnson didn't say, but did point out that it doesn't think additional clinical trials will be required to satisfy the FDA. The potential culprit could be a manufacturing issue or a problem proving that the 800-mg pill releases the same amount of drug as two 400-mg pills. Either way, it's probably not that big a deal to rectify although investors should be a little worried that it happened in the first place. Johnson & Johnson should know how to satisfy the FDA's requirements to get a new dosage approved.

In theory, the rejection could keep Johnson & Johnson from selling the 800-mg pill for six months or more. Waiting for the approval isn't the end of the world, but it certainly would be nice to have the higher-dose pill approved. For many diseases, taking two pills is fairly common. But HIV patients usually don't take just one medication. Prezista is always taken with Abbott Labs' (NYSE: ABT  ) Norvir and in the clinical trials, patients also took Gilead Sciences' (Nasdaq: GILD  ) Truvada.

That's a lot of pills compared to Atripla, which contains Truvada and Bristol-Myers Squibb's (NYSE: BMY  ) Sustiva all in one pill, and Gilead's new once-daily Quad pill. Anything Johnson & Johnson can do to reduce the pill burden should incrementally help with sales.

First, though, the pharma has to convince the FDA that its one-pill dose is approvable, something that seems a little more elusive than it should be.

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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson and Gilead Sciences. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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