Will These Drugs Get FDA Approval?

It's the binary news events -- clinical trial results and FDA approvals -- that make drug developers so fun to invest in and so hard to stomach, sometimes at the same time. Let's take a look at a pair of companies expecting FDA decisions next month.

Third time's a charm?
Investors in Discovery Laboratories (Nasdaq: DSCO  ) have been waiting for four years since its marketing application was originally submitted to see Surfaxin approved, but they may not have to wait much longer -- the FDA is expected to make a decision by May 1.

Discovery Labs has already received two approvable letters for Surfaxin, a drug used to prevent respiratory death syndrome (RDS) in premature infants. Clinical trials showed the drug worked as well, if not better, than GlaxoSmithKline's (NYSE: GSK  ) Exosurf and Curosurf from Dey, which was recently acquired by Mylan (NYSE: MYL  ) .

The most recent approvable letter focused on manufacturing and stability of the drug -- not efficacy or safety. Assuming the company has taken care of business and answered all the agency's questions, an approval seems pretty likely at this juncture.

Avoiding long-term use
It's not exactly something drug companies want to encourage their patients to do -- use less of their drug -- but Adolor (Nasdaq: ADLR  ) doesn't have much of a choice. An FDA advisory panel thought the company's drug, Entereg, was good enough to use in patients experiencing post-operative ileus (POI), a painful post-abdominal-surgery constipation-like condition, but didn't think the company's plan to keep it out of the hands of patients that might take it long-term was stringent enough. Entereg has some safety issues in patients that have taken it long-term, and the FDA wants to avoid having patients use the drug off-label.

Rather than wait for the FDA to send them a rejection letter, Adolor and marketing partner GlaxoSmithKline fixed their risk-management plan in February, which brings us to a May 10 decision date.

Given the high praise for the efficacy of Entereg by both the advisory committee and the FDA, the drug's chance of approval seems pretty good. The only snafu could come if the agency still doesn't like the risk-management plan, which could lead to an additional delay.

The "D" in PDUFA doesn't stand for "deadline"
It bears reminding that these dates are set by the Prescription Drug User Fee Act (PDUFA), which requires drugmakers to pay the FDA to review their applications in a timely manner -- 10 months for a standard review. But these PDUFA dates aren't set in stone. These are not deadlines that the FDA is guaranteed to make. Recently, with the FDA being strapped for cash, we've seen a few missed; Cardiome (Nasdaq: CRME  ) has been waiting for an FDA decision since Jan. 19. Talk about dragging things out.

On the other hand, the agency can actually make a decision before the PDUFA date. Progenics Pharmaceuticals' (Nasdaq: PGNX  ) and marketing partner Wyeth's (NYSE: WYE  ) Relistor was approved last week, but its PDUFA date was actually tomorrow.

Fools don't need another reason not to day trade, but counting on a government agency should certainly persuade anyone from trying to get in and out of these stocks quickly before and after the decisions are made. Investors are better off trying to pick the companies that are most likely to gain FDA approval and then buy in well ahead of the PDUFA date.

Approved or not approved, that is the question
I think both Surfaxin and Entereg have a great chance of being approved next month. The drugs appear to work quite well, so the only question is whether management has addressed all of the FDA's concerns.

It's time to put your mouse where your mouth is and give your opinion on whether Surfaxin and Entereg will be approved. After you vote, feel free to leave a message on our discussion boards as to your reasoning.

Read/Post Comments (0) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 632905, ~/Articles/ArticleHandler.aspx, 10/22/2016 1:27:57 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/9/2011 4:00 PM
ADLR.DL $4.77 Down +0.00 +0.00%
Adolor Corp CAPS Rating: *
WINT $2.85 Up +0.37 +14.92%
Discovery Laborato… CAPS Rating: **
GSK $41.13 Down -0.30 -0.72%
GlaxoSmithKline CAPS Rating: ***
MYL $37.02 Down -0.59 -1.57%
Mylan CAPS Rating: ***
PGNX $5.54 Down -0.16 -2.81%
Progenics Pharmace… CAPS Rating: ****
WYE.DL $0.00 Down +0.00 +0.00%
Wyeth CAPS Rating: ***