GlaxoSmithKline's (NYSE: GSK) press release yesterday was enough to make me nauseous. Seriously. Unfortunately, I won't be able to take the British company's anti-nausea medication, Rezonic, because the marketing approval was turned down by the Food and Drug Administration.
It wasn't the rejection that had me nauseous, but the information in the press release. Or lack thereof. At just four sentences -- excluding disclosures -- it didn't let investors know anything about the chances of approval for Rezonic.
Johnson & Johnson (NYSE: JNJ) is equally famous for terse press releases when the company gets complete response letters. The part of the press release about the FDA's decision to reject Risperdal Consta for bipolar disorder was also just four sentences, but at least it let investors know that no additional trials were needed.
Companies will argue that they need to keep the "complete response letter" from the FDA a secret for competitive reasons. That may be so, but how about at least throwing investors a bone so they can get a feel for how long the wait might be?
The worst part is that investors have already been waiting for a while for a decision by the FDA on Rezonic. The original PDUFA date was at the end of March. As I wrote at the time, the data looked good, but we don't have any way of knowing what kind of additional information the FDA wants before it'll approve the drug.
Rezonic will be prescribed with Glaxo's current treatment, Zofran, to prevent nausea and vomiting after chemotherapy or surgery. Zofran is only a $200 million-a-year drug, but since adding Rezonic increases the effectiveness, Glaxo might be able to take some market share from Merck's (NYSE: MRK) Emend, Eisai's Aloxi, and Solvay Pharmaceuticals' Marinol, which is available as a generic from Par Pharmaceutical (NYSE: PRX). That is, if the FDA actually approves the drug ... someday.
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