Depressing, in More Ways Than One

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Food and Drug Administration rejections are depressing to watch. The only thing worse is to watch two companies affected by a rejection. Salix Pharmaceuticals (Nasdaq: SLXP  ) and Progenics Pharmaceuticals (Nasdaq: PGNX  ) are down 12% and 50%, respectively after the FDA turned down the companies' request to expand the use of Relistor to patients with constipation caused by pain medications for chronic conditions.

Relistor has languished since it was approved in 2008 to treat opioid-induced constipation in patients with advanced illness who are receiving palliative care. Wyeth, Progenics' original partner, handed back the rights to the drug just before Pfizer took over.

Expanding Relistor's use into less-serious patients could have increased sales substantially. But Progenics and its new partner Salix said the FDA wants more clinical data before it can approve the drug. The companies didn't go into more detail, but I think investors are probably worried there's a safety issue. The FDA is likely to be more concerned about side effects in a population that just has a chronic pain issue than the current indication where patients have serious medical issues and the goal is to make them comfortable.

More depressing for investors who don't even own either company, the rejection came after the FDA extended the review of the drug by three months. Investors generally view extensions as a good sign, because if the FDA had already decided to reject the drug, it seems logical that it would just reject the drug rather than continue with the review. There are certainly a lot of examples of drugs that got approved after an extension, most recently VIVUS' (Nasdaq: VVUS  ) Qsymia.

But Relistor's rejection should serve as a reminder -- as depressing as it is -- that the theory doesn't work all the time. It's not even the first time it's happened. Both Merck KGaA's multiple sclerosis drug cladribine and XenoPort (Nasdaq: XNPT  ) and GlaxoSmithKline's (NYSE: GSK  ) restless leg syndrome drug, Horizant, failed to gain FDA approval after the agency extended its decision on the drugs.

That's drug development for you. The highs are high, the lows are low. And sometimes it's hard to tell them apart.

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Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Pfizer. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (3)

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  • Report this Comment On July 31, 2012, at 4:47 PM, hygro wrote:

    There is a reason Pfizer/Wyeth gave back the drug -- it is a pretty crappy drug. It had been shopped around to many pharmas before Wyeth signed on. If you look at the FDA approval hearings it was not a well liked drug and was approved without a lot of enthusiasm. The medical community hasn't really embraced it either.

    This is an environment where large players are desparate for new revenue opportunities. If there was a real market potential and this was a decent drug, it would have been snapped up. No wonder Progenics could only get a small player like Salix to take it on. These are high risk scenarios, not for the faint of heart -- more downside then upside. They don't even have the commercial muscle to drive revenue even if it had been approved. Too many other options to look at.

  • Report this Comment On November 06, 2012, at 5:01 PM, coderdan wrote:

    My wife who has late stage colon cancer metastasis in the liver. She is a stage 4 patient with less than 6 months to live. Currently on high doses of Oxycontin, 3 times per day. Plus high dose oxycodone every 2 hours.

    Her opioid constipation was horrendous. She was prescribed Relistor, and it truly has been a miracle for her. None of the other pills, drinks, etc had any impact. Relistor every other day is working.

    Of some concern there have been a few times where she hasn't had a BM with this product. I suspect that the actual working rate is about 60%. Even at that, it works for her and would be devastated if they were to discontinue it.

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