Pfizer's Painful FDA News

Pfizer's (NYSE: PFE  ) shareholders experienced the two most painful words in drug development yesterday: "clinical hold." And its pain treatment tanezumab isn't going to help alleviate the sting; it's the subject of the hold.

The Food and Drug Administration asked the drugmaker to stop enrolling new patients with osteoarthritis and to stop dosing osteoarthritis patients who are already in the trials testing tanezumab. Apparently a "small number" of patients with osteoarthritis saw their condition get worse after taking tanezumab.

The reason that clinical holds are so frustrating for investors and drugmakers alike is that they're often associated with a small number of cases, which makes it hard to prove or disprove that the drug caused the side effect. Merck (NYSE: MRK  ) and Dynavax Technologies' (Nasdaq: DVAX  ) hepatitis B vaccine, Heplisav, was held up because of one case of a very uncommon blood vessel inflammation called Wegener's granulomatosis. Oncothyreon (Nasdaq: ONTY  ) and Merck KGaA recently restarted their lung cancer program after the clinical trials were put on hold when a single patient got encephalitis, an inflammation of the brain.

In addition to being tested in osteoarthritis patients, tanezumab is also in clinical trials testing its ability to control pain in patients with other conditions such as cancer and back pain. Pfizer will have to meet with the Food and Drug Administration this week to justify continuing those trials without patients who might also have osteoarthritis.

The delay while Pfizer sorts this out is good news for drugs such as Smith & Nephew's Supartz, sanofi-aventis' (NYSE: SNY  ) Hyalgan, Johnson & Johnson's (NYSE: JNJ  ) Orthovisc, and Genzyme's (Nasdaq: GENZ  ) Synvisc-One, which won't have competition as early as expected, if ever.

On the plus side, Pfizer still has Celebrex, which is used to control pain in osteoarthritis patients, while it waits to sort out this mess.