Will These Drugs Get Past the FDA?

This week is shaping up to be one heck of a roller coaster for drug companies. In addition to VIVUS' (Nasdaq: VVUS  ) Qnexa -- discussed previously here -- three other drugs could also hear from the Food and Drug Administration on Friday.

A risky second-chance candidate?
Of the three, Avanir Pharmaceuticals' (Nasdaq: AVNR  ) AVP-923 is the hardest to make a call on. The drug clearly works well in treating pseudobulbar affect, a neurological disease that causes uncontrollable bouts of crying or laughing. But then it worked well when the FDA turned down the drug back in 2006.

The problem was, and still is, potential safety issues. Acanir lowered the dose of one of the components in AVP-923 to decrease the potential for heart issues. The new formulation seems to meet guidelines. But given what's known about the drug, I wouldn't put it past the safety-conscious FDA to hold AVP-923 to a higher standard than what might be acceptable for a drug that didn't have the same background.

Bug out
Antibiotics have had a bit of a bad luck streak, but Forest Labs' (NYSE: FRX  ) ceftaroline could change that. The drug received a unanimous vote of confidence from an FDA advisory panel to treat pneumonia acquired in the community -- as opposed to the hospital -- as well as bacterial skin infections.

There's always the possibility of manufacturing issues -- the advisory panel doesn't generally look at that -- but from what's known publicly about the drugs, ceftaroline looks like it has the best chance of approval of the three.

Don't get overheated on this one
Biodel
's (Nasdaq: BIOD  ) Linjeta phase 2 trial looked good, with the new insulin showing better control of blood sugar than Eli Lilly's (NYSE: LLY  ) Humulin and Humalog.

The phase 3 trial? Not so much. A trial in type 1 diabetics failed to show that Linjeta worked as well as Humulin. The discrepancy from the phase 2 trial was traced back to blood samples from patients in India that were overheated while on their way to be tested. If you remove those patients from the trial, Linjeta seems to be working as well as Humulin.

Will the FDA buy it? My guess is probably not. Think of it from the agency's point of view: Why bother approving the drug with massaged data when a new trial can answer the question of whether the drug works for sure? That's not fair to investors, especially if a new trial comes back positive, but he who has the approval stamp makes the rules.

A pair of bonus decisions
Bristol-Myers Squibb
(NYSE: BMY  ) could hear from the FDA about two drugs this week as well. But they're both for expanding already-approved drugs -- Onglyza plus metformin and Sprycel -- so they may not help the company's top line all that much.

Combining Onglyza with a generic diabetes drug called metformin will make it more convenient for patients who are taking both drugs, but it's not going to drive many new sales. Onglyza has had a tough time competing with Merck's (NYSE: MRK  ) diabetes drug Januvia, and it'll continue to do so unless Bristol-Myers can somehow differentiate Onglyza from the entrenched leader. Onglyza plus metformin doesn't do that, since Merck already sells a combination of Januvia plus metformin called Janumet.

Expanding Sprycel into first-line treatment of chronic myeloid leukemia -- it's currently only used after patients fail Novartis' Gleevec -- should increase sales. But Novartis also has a new CML drug, Tasigna, which also beat Gleevec. Until both drugs are approved for the earlier use, we won't know which one will prosper on the market as a first-line treatment.

Trader beware
Keep in mind that October has been one of the busiest months I can remember for FDA decisions. So far, the FDA has managed to stay on task -- even delivering a decision on Bydureon from Amylin Pharmaceuticals, Eli Lilly, and Alkermes early -- but the agency is in no way required to make a decision by the PDUFA dates.

Investors could get a treat a few days early, but don't be surprised if the FDA has a few pre-Halloween tricks up its sleeve.

I've had my say. Which of these drugs do you think will get approved? Sign off in the comments box below.

Novartis is a Motley Fool Global Gains selection. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.


Read/Post Comments (12) | Recommend This Article (14)

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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.

  • Report this Comment On October 26, 2010, at 3:46 PM, pratik92 wrote:

    what are your chances on approval??

  • Report this Comment On October 26, 2010, at 3:49 PM, pratik92 wrote:

    sorry...what are your chances of approval for avanir

  • Report this Comment On October 26, 2010, at 4:22 PM, rbess1965 wrote:

    What are your opinions about this?

    According to an article by Joseph Krueger, Wedbush continues to be bullish on Linjeta approval, and has stated that Biodel is prepared with supplementary data at hand, as described here:

    Although FDA acceptance of an NDA filing is usually a minor event, in this case there is perceived risk that the damaged Phase 3 samples could cause the FDA to find the filing to be incomplete. Early in the Phase 3 program, samples taken from the first patients in India were accidentally destroyed by heat exposure. We believe the FDA is likely to require an additional study to fill in the gap before deciding on approval and management indicated on the fiscal 2009 call they were close to dosing the first patient in a supplemental study testing VIAject in type 1 diabetics. The company intends to have data from this trial available by the PDUFA deadline.

    Indeed, two trials, one each in Type 1 and Type 2 diabetics examining the long-term safety and efficacy of Linjeta (Trial numbers NCT00875459 and NCT00875108) were completed early this year. Biodel has not publicly released this data, but has stated that it will be used in the NDA. Source: http://seekingalpha.com/article/225291-biodel-s-linjeta-shou...

  • Report this Comment On October 26, 2010, at 5:35 PM, TMFBiologyFool wrote:

    Pratik -- It's hard to put a number on it because we're talking about a squishy safety vs efficacy issue. I'd approve the thing, but the FDA is increasingly safety conscious, which leads me to error on the side of caution.

    Rbess -- Realize those aren't new trials, but an extension of the original trials (some patients continue to receive drug and are observed for long-term safety issues). SOP, but probably won't change the FDA's decision if the agency is going to reject the trial all together.

    Also note that acceptance of the marketing application doesn't mean the FDA won't throw out the trial. See J&J and Basilea's antibiotic ceftobiprole as an example.

    -Brian

  • Report this Comment On October 26, 2010, at 9:06 PM, kmv98finance wrote:

    Any drug with a chance of safety concerns is a foolish investment. None of the digs or companies mentioned in this article is exciting. I'm staying away.

  • Report this Comment On October 26, 2010, at 9:07 PM, kmv98finance wrote:

    Digs = drugs on this stupid iPhone

  • Report this Comment On October 27, 2010, at 10:57 AM, rbess1965 wrote:

    I'm really new to this and will probably get hammered but from what I've seen, don't all new drug apps have some measure of safety concerns? The first two I ever picked were DNDN & HGSI and if I remember correctly, there were plenty of people very negative on them too. I know I may not get all of this, but I can hope that at the very least this med will be a positive thing for the sufferers of Diabetes and it will do well.

  • Report this Comment On October 28, 2010, at 8:34 AM, machapungo wrote:

    Do "work as well" questions really indicate a safety issue? Many illnesses are treated with many drugs that

    do not have equal performance. This is especially true when measured on multiple people.

  • Report this Comment On October 30, 2010, at 8:50 AM, sac78028 wrote:

    big slap for brian orelli. These people can only write articles without actually reading the medical literature and evaluating it before posting online. I always do my analysis instead of listening to people like brian orelli.

    Same thing applies to BIODEL company. whether FDA approves their drug this time or not but will be a life time opportunity. As a clinical pharmacist, I bet this drug will be approved soon.

  • Report this Comment On October 30, 2010, at 8:52 AM, sac78028 wrote:

    This coming monday buy biod as much as possible before you guys will regret it again like people who missed avnr stock.

    good luck.

    long biod, dndn, avnr, hgsi, cvm and vvus.

  • Report this Comment On November 01, 2010, at 9:13 AM, dlhdouble wrote:

    Thanks for the nice little writeup.

  • Report this Comment On November 04, 2010, at 12:57 AM, Meriditht wrote:

    It will be interesting to watch how the psychiatric and drug communities widen the spectrum of patients who need the anti-crying, anti-laughing drug, pseudobulbar. All of a sudden kids getting the giggles during assembly will be targets for prescribing. Visit http://CCHR.org for their documentaries on this very thing.

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