Biotech 101: Off-Label Prescriptions

Investors can learn something from Medivation, GlaxoSmithKline, Amarin and AstraZeneca.

Jun 23, 2014 at 7:25PM

When the Food and Drug Administration approves a drug, it's given a label, although there's no sticky stuff on the back and it's not attached to the bottle. Drug labels are multipage documents that list everything from the chemical description of the drug to side effects to the results from clinical trials.

The first section, called Indications and Usage, describes what the drug is approved to treat, but doctors are allowed to prescribe FDA-approved drugs for any indication they want. These so-called off-label prescriptions can be very important to companies.

Cancer drugs, for instance, are often initially approved for late-stage patients before going after a first-line indication. After the data for the first-line indication has been released but before the FDA approves the expanded indication, doctors often prescribe the drug for new patients. Medivation (NASDAQ:MDVN) and Astellas are currently in that situation with their prostate cancer drug Xtandi. The drug is approved only for patients who have failed chemotherapy, but they've shown that the drug also works well in patients who have yet to receive chemotherapy.

Other drugs get used, even though there's little evidence that they help patients. GlaxoSmithKline's (NYSE:GSK) fish oil Lovaza, for instance, is often used for patients with moderately high triglyceride levels even though it's approved only for patients with extremely high levels. There's no proof of a clinical benefit for drugs that lower patients' triglyceride levels if they're not extremely high, although Amarin (NASDAQ:AMRN) and AstraZeneca (NYSE:AZN) are testing their respective fish oils in patients with moderately high triglyceride levels. Interestingly, Amarin's Vascepa hasn't been able to pick up much of the off-label sales that GlaxoSmithKline has, perhaps suggesting that doctors are becoming more tentative about prescribing the drugs off-label. AstraZeneca's Epanova was approved only last month, so we'll have to wait and see if sales are also subdued until more clinical data is available.

Watch the following video for more info on off-label sales from senior biotech specialist Brian Orelli and health-care analyst David Williamson, including how off-label marketing can cost companies billions in fines.

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Brian Orelli and The Motley Fool have no position in any of the stocks mentioned.  David Williamson owns shares of Amarin. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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