As I've said many times before, drug manufacturing is a black box for investors. A drug can have perfect efficacy and safety, but if the Food and Drug Administration has an issue with the manufacturing of the drug, it's not going to be approved. Unfortunately, investors often get no information from the company about the manufacturing of the drug.
For Navidea Biopharmaceuticals'
Navidea wasn't willing to give a timeline for resubmitting, but did offer one nugget of information that makes it sound like the issue could be cleared up quickly. The FDA's concerns surround Good Manufacturing Practices, which are typically easier to fix than processes for making the drug. For instance, it's a lot harder to change the way the drug is made to ensure it fits within specifications than it is to change the cleaning schedule of an instrument.
Best case scenario, the issue is cleared up in two weeks. That's how fast Forest Labs
Realistically, unless we're talking about something really minor, investors should figure it could take a couple of months to get a plan in place to fix the issues and resubmit to the FDA. MAP Pharmaceuticals
As a worst case scenario, there's Discovery Laboratories
Once Navidea resubmits its package to the FDA, the agency will decide if it's a class 1 or class 2 response, giving the FDA a goal of making a decision in two months or six months. If it really is a minor issue, the FDA will likely give Navidea a class 1 response, which I would take as a good sign that there's nothing else wrong with the drug. Transcept Pharmaceuticals, for example, received a class 1 response for the resubmission of its sleeping pill Intermezzo, which was approved a month later.
This recent drop could be a buying opportunity -- just keep in mind that Navidea is low on cash with just $17 million in the bank at the end of last quarter. If the issue drags on, it'll need to go into debt or dilute investors through a secondary offering, which isn't ideal at this knocked down price.
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