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It seems there were a few reviewers at the Food and Drug Administration looking to clear paperwork off their desks before leaving on Christmas vacations. The agency issued approvals for four drug applications on Friday.
I kid you not
Roche's (NASDAQOTH: RHHBY ) Tamiflu has been on the market as a flu treatment for adults for more than a decade and was subsequently approved for children ages 1 and older, but on Friday, the FDA approved its use in children as young as 2 weeks old.
Gilead Sciences (NASDAQ: GILD ) receives royalties on Tamiflu sales, but let's face it, the addition of children younger than 1 isn't going to have a major effect on sales. There's clearly a lot more patients older than the age of 1 than there are between 2 weeks and 1 year of age.
What's interesting about this approval is that the FDA made the approval based on extrapolation of data from previous studies in adults and older children. An approval with less-than-perfect data is good news for companies like Sarepta Therapeutics (NASDAQ: SRPT ) , which is hoping the FDA will approve its drug for children with Duchenne muscular dystrophy based on data from just a few patients.
All I want for Christmas is to eat
After fairly positive FDA briefing documents and a subsequent unanimous vote recommending approval by the advisory committee, it seemed fairly likely that NPS Pharmaceuticals (UNKNOWN: NPSP.DL ) would gain approval for its short bowel syndrome drug Gattex. Given that expectation, it's also not all that surprising that the stock ended up flat on the news.
Patients with short bowel syndrome, often caused by Crohn's disease, aren't able to take up nutrients from the food they eat, so they have to take intravenous dietary supplements. Gattex reduced the use of the supplements and in some cases eliminated them altogether.
NPS plans to launch the drug in the first quarter of next year. Short bowel syndrome isn't a particularly large market, and expectations don't seem all that high. If NPS can get off to a solid launch, there's upside from its $800 million market, especially since it has another phase 3 drug that will hopefully be in front of the FDA by mid-2013.
Stay calm and inhale
Alexza Pharmaceuticals (UNKNOWN: ALXA.DL ) was scheduled to hear from the FDA about its inhaled antipsychotic drug Adasuve on Friday, so it wasn't a big surprise when shares were halted toward the end of the day.
The FDA rejected Adasuve in May. At the time, management claimed the only major issue had to do with manufacturing issues. In theory, that's something that's easy to clear up, but investors don't get much insight into the manufacturing process, so there were no guarantees that Alexza had satisfied the FDA. That's the good news.
The bad news is that Alexza doesn't plan to launch the drug until early in the third quarter of next year. As Amarin (NASDAQ: AMRN ) and Arena Pharmaceuticals (NASDAQ: ARNA ) have learned, investors have a short attention span. Don't be surprised to see this drop as investors lose patience and move on to the next binary event.
A pox on chicken pox
Cangene gained FDA approval of its chicken pox treatment VariZIG on Friday. The drug is essentially purified antibodies against the virus derived from plasma of individuals that have already had chicken pox. It's designated to treat patients most venerable to complications from chicken pox: immuno-compromised children and adults, newborns, pregnant women, premature infants, children less than a year old, and adults with no immunity to the virus.
If it had come years ago, before the introduction of the chicken pox vaccine, VariZIG might have been a big seller, but it's hard to see how this will be much more than a niche product. Of course, Cangene, which is traded on the Toronto Stock Exchange, only has a market cap of a little over $100 million Canadian, so it doesn't need a lot of sales to drive the stock price higher.
Good news for 2013?
Well, four approvals in one day can't be bad news. There are some signs that the agency might be a little more lax with what's need for approval. And at the very least, the approvals signal that the FDA is interested in meeting or exceeding the goals it sets for making decisions about marketing applications.
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