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Regeneron Pharmaceuticals (Nasdaq: REGN ) shareholders will have to wait an extra three months to see revenue from the biotech's macular degeneration drug, Eylea. And they weren't too happy about it, sending shares down 3% on the news yesterday.
Granted, investors are rightfully a little jumpy, but a three-month extension of the Food and Drug Administration's review doesn't seem like that big of a deal. The FDA granted Eylea a priority review, which means the agency plans to complete its review in six months instead of the standard 10 months.
According to Regeneron, more than 50% of drugs given priority review end up having their review extended beyond the six-month goal. It happened to Pfizer's (NYSE: PFE ) Prevnar 13, Human Genome Sciences's (Nasdaq: HGSI ) Benlysta, and Bristol-Myers Squibb's (NYSE: BMY ) Yervoy. All three were eventually approved. In fact, I can only think of one recent priority review that was extended and eventually not approved -- Merck KGaA's cladribine -- but I don't think the extension had anything to do with its approvability.
Nor does that seem to be the case with Eylea. The delay appears to stem from the sheer volume of data about the manufacturing of the drug that Regeneron had to submit and the fact that the agency received the data in the last three months of the review cycle. There haven't been any changes to manufacturing, and Regneron already has a drug on the market, which should give investors confidence that the delay isn't a sign that manufacturing will hold up an approval.
It just appears that the shortened review time lowered the threshold of what's considered a major enough amendment to justify extending the review. If Eylea had been given a standard review, the FDA might have had enough time to review the new data without an extension. The good news is that the original six months plus an additional three months is less than the standard 10 months, so Regeneron is still coming out ahead.
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