Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Johnson & Johnson Gets Rejected

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Remember when it was really uncommon to find the Food and Drug Administration disregarding the advice of its outside experts? For instance, Dendreon's (Nasdaq: DNDN  ) shares spiked when the advisory-committee panel voted in favor of Provenge, only to plummet back to earth when the FDA didn't follow its panel's advice.

Fools, those days are over.

Johnson & Johnson (NYSE: JNJ  ) is the latest victim of the FDA’s tendency not to follow its panel's recommendation. Today the company announced that the FDA had rejected its current bid to expand the label of its antibiotic Doribax to include the treatment of hospital-acquired pneumonia. J&J will probably resubmit with more data in reply to the Complete Response letter. The drug is used to treat complicated internal infections and is already approved in Europe for that expanded use. Last month, an advisory panel said the drug was both safe and effective when tested for the expansion.

Johnson & Johnson's antibiotic joins Schering-Plough's (NYSE: SGP  ) suggammadex and Cardiome's (Nasdaq: CRME  ) Kynapid on the list of drugs that have recently received rejections even though the advisory panels voted in favor of them.

Doribax's rejection probably shouldn't have come as a huge surprise. The panel just barely recommended approval -- voting eight to five that it was safe and seven to six that it was effective. Also, the FDA has increasingly scrutinized antibiotics in the last few months, with Wyeth (NYSE: WYE  ) getting a rejection for Tygacil. And approval for Theravance's (Nasdaq: THRX  ) telavancin appears to be delayed indefinitely.

The take-home message for investors is that you can no longer count on the headline "FDA Advisory Panel Recommends Approval of Your Favorite Drug" to guide your investment decisions. Investors need to dig a little deeper by reading the FDA's advisory-panel briefing documents to get better insight into what the agency is thinking. And even then, don't count on it.

Motley Fool Rule Breakers is always on the hunt for hot drug stocks and other cutting-edge picks. Click here to see all of our latest discoveries with a free 30-day trial subscription.

Fool contributor Brian Orelli, Ph.D., doesn't invest in a lot of industries he doesn't understand. He doesn't own shares of any company mentioned in this article. J&J is an Income Investor recommendation. The Fool's disclosure policy understands more than it's letting on.

Read/Post Comments (0) | Recommend This Article (3)

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: 712109, ~/Articles/ArticleHandler.aspx, 10/22/2016 5:59:44 PM

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 20 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

10/21/2016 4:01 PM
JNJ $113.44 Down -1.43 -1.24%
Johnson and Johnso… CAPS Rating: ****
CRME $3.01 Down -0.04 -1.31%
Cardiome Pharma CAPS Rating: *
DNDNQ $0.00 Down +0.00 +0.00%
Dendreon Corp CAPS Rating: *
SGP.DL2 $28.15 Down +0.00 +0.00%
Schering-Plough Co… CAPS Rating: ****
THRX.DL $0.00 Down +0.00 +0.00%
Theravance CAPS Rating: **
WYE.DL $0.00 Down +0.00 +0.00%
Wyeth CAPS Rating: ***