Will the FDA Approve Merck's Insomnia Drug?

The advisory committee meeting is this Wednesday, but investors will have to wait until the summer to discover the Food and Drug Administration's decision.

Max Macaluso
Max Macaluso
May 20, 2013 at 6:30PM
Health Care

It's no secret that decisions from the Food and Drug Administration are incredibly hard for investors to predict. Take for instance the FDA's rejection of Novo Nordisk's (NYSE:NVO) insulin drugs Tresiba and Ryzodeg in February. The products got the stamp of approval in the EU and Japan -- and approval in the United States seemed like a foregone conclusion -- but the FDA surprisingly decided that data from a cardiovascular outcomes study is necessary before the company can resubmit its application.

Investors were surprised after the decision was announced, and the same situation could happen when the FDA makes a decision on Merck's (NYSE:MRK) insomnia drug Suvorexant this summer. So far, the data suggests that this drug works well in patients and has a good safety profile. However, does the scientific advisory committee have any concerns with this drug's safety? What could a rejection potentially mean for Merck investors? Health care analyst Max Macaluso discusses these questions in the following video.