It's not often that you see a drug developer release data from two positive phase 3 trials for its lead pipeline compound and see its shares fall more than 4%, but that's what happened to Pozen
The good news is that the company's painkiller, PN 400, which is being developed with AstraZeneca
The only problem is that the Food and Drug Administration isn't so sure that "endoscopically confirmed gastric ulcers" are the right endpoint. Back in October the FDA notified Pozen that it's trying to decide if the endpoint is clinically relevant. Showing that a drug changes something in the body isn't good enough for the agency; the FDA wants to know that the change results in a real benefit for patients.
Changes in the use of surrogate endpoints also killed the chances of Merck's
Pozen isn't expecting to hear back from the agency until the first quarter of next year, so investors will have to wait a while to see if Pozen and AstraZeneca will be able to file their marketing application in the middle of next year or if an additional trial will be necessary. With the way the FDA has been tightening up standards, investors should probably plan for the worst.
Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is a selection of the Motley Fool Income Investor and Inside Value newsletters, and the Fool owns shares. The Fool's disclosure policy always takes its NSAIDs on a full stomach.