The Motley Fool Previous Page


FDA Makes This Biotech Less Risky

http://www.fool.com/investing/high-growth/2012/09/19/fda-makes-this-biotech-less-risky.aspx

Brian Orelli, Ph.D.
September 19, 2012

Using a companion diagnostic to identify patients that a drug will help makes it much easier to prove that a drug is effective. But there's a regulatory downside because the companion diagnostic has to be approved for the company to sell the drug. If there's no companion diagnostic, there's no way for doctors to figure out which patients are appropriate for the drug.

So when ARIAD Pharmaceuticals (Nasdaq: ARIA  ) and MolecularMD announced that they were withdrawing the Food and Drug Administration application for premarket approval for their BCR-ABL T315I mutation test, it seemed like very bad news for ARIAD. The company's leukemia drug, ponatinib, which the test was developed for, is currently under review at the FDA.

While the press release headline sounded ominous, it turns out there was a pretty g