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Regeneron Pharmaceuticals (Nasdaq: REGN ) announced today that the Food and Drug Administration had put its anti-nerve growth factor being developed with sanofi-aventis (NYSE: SNY ) on clinical hold. The drug goes by the catchy names REGN475 or SAR164877, depending on which company wants its call letters associated with it.
Regeneron didn't even bother to issue a press release about it or hold a conference call to discuss the ramifications; it just filed a short 8-K with the Securities and Exchange Commission to let shareholders know the bad news. Investors shrugged it off in kind. Shares are essentially flat today.
It's not that REGN475/SAR164877 doesn't work; the drug passed a phase 2 trial testing it in patients with osteoarthritis of the knee. But Regeneron has a bunch of other drugs that are farther along, which make up a majority of its value.
For instance, VEGF Trap-Eye looks like it'll have a fairly easy time getting past the FDA now that the company has announced two positive phase 3 trials. Regeneron also has two other phase 3 compounds: cancer drug aflibercept and its already-approved Arcalyst, which is being tested as a treatment for gout. And there's Regeneron's deal with Sanofi to develop four to five new drugs per year through 2017. The company can certainly afford to lose a phase 2 pipeline candidate.
The clinical hold might actually affect Pfizer (NYSE: PFE ) the most. The FDA issued the hold on REGN475/SAR164877 because it believes the entire class of drugs that REGN475/SAR164877 belongs to -- anti-nerve growth factors (NGF) -- might have problems. Pfizer announced earlier this year that tanezumab, which is further along in the same class, was also put on hold. There was a theory that tanezumab might have been working too well, dulling the pain, which caused patients to overuse their joints. Extending the clinical hold to the entire class might signal that the agency isn't going to take this issue lightly.
If the class was going to die, being late to the party like Sanofi, Regeneron, and Johnson & Johnson (NYSE: JNJ ) and Abbott Labs (NYSE: ABT ) , which also have early stage anti-NGF programs, ironically may save the companies a lot of money on costly phase 3 trials.
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