Poor Idenix Pharmaceuticals (Nasdaq: IDIX ) . Less than two weeks after the Food and Drug Administration put its hepatitis C drug IDX184 on a clinical hold, the agency was back for more, stopping development of its next-generation hepatitis C drug, IDX19368.
Being a next-generation drug, IDX19368 is further behind in the develop process. In fact, IDX19368 hasn't even been tested in humans.
Idenix isn't particularly less valuable if IDX19368 can't be developed; most of its potential is wrapped up in IDX184. But putting another drug on clinical hold is a further sign at how serious the FDA is taking BMS-986094's side effect issues. IDX184 and IDX19368 are both related to BMS-986094, which Bristol-Myers Squibb (NYSE: BMY ) discontinued development of last week after nine patients taking BMS-986094 in a clinical trial were hospitalized.
The biotech thinks its drugs are different enough from BMS-986094 that they shouldn't have the same side-effect profile. But the only way to definitively prove that is by testing the drug in humans. For now, the FDA won't let Idenix do that directly -- thus the clinical hold -- so the company will have to use preclinical laboratory experiments to explain why BMS-986094 causes side effects and then prove its drugs won't have the same problem.
Interestingly, Bristol has offered its help in determining what's wrong with BMS-986094, which might make things a little easier, but investors shouldn't expect this to be a cakewalk.
If Idenix is able to emerge on the other side of the clinical-hold black hole, maybe Bristol would be interested in partnering with Idenix. Gilead Sciences (Nasdaq: GILD ) certainly doesn't seem interested, and there aren't too many other drugs in the "nuc" class of drugs that BMS-986094 and IDX184 are in. Vertex Pharmaceuticals (Nasdaq: VRTX ) has one further back in the clinic, although it could catch up if this clinical hold goes on for a while -- assuming, of course, that the FDA doesn't put a hold on Vertex's drug too.
Ah, the joy of drug development.
You can partially offset the waves of drug development with dividend paying stocks. Check out the Fool's new free report "Secure Your Future With 9 Rock-Solid Dividend Stocks," where you'll find one drug developer and eight other promising companies. Get your free copy.