Adolor Stays in the Ring

Sometimes, the news that moves shares of biotech stocks really makes you wonder. Shares of Adolor (NASDAQ:ADLR) were up as much as 18% yesterday after the development stage drugmaker announced that the FDA had accepted for review additional information about its lead drug, Entereg.

This doesn't tell us anything about the FDA's position on the drug.  

Entereg is potentially a treatment for postoperative ileus (essentially constipation following surgery) and opioid-induced constipation. Adolor received an "approvable letter" for Entereg as a treatment for the former late last year, as the FDA asked for long-term safety data from an ongoing trial study.

When the results of that long-term study were announced in April, rather than mollify those with concerns about the compound's safety, new issues were raised as patients taking Entereg experienced a much higher incidence of neoplasm (an abnormal proliferation of cells) as compared to those taking a placebo.

As a result of the new safety issues, Adolor and partner GlaxoSmithKline (NYSE:GSK) announced that they were halting new trials of the drug until they could review the data. 

Currently, there are no good treatments for POI on the market, although that could change if Wyeth (NYSE:WYE) and Progenics (NASDAQ:PGNX) get approval for their competing drugs.

What's surprising about the temporary share surge yesterday (although it looks like Adolor is giving back most of those gains today) is that Adolor had already given guidance several times that it would file an approvable letter response for Entereg this year even after the negative safety data were revealed.

The FDA's acceptance of Adolor's response letter does not signify in any way that the agency is satisfied that Adolor has answered its earlier concerns. Acceptance of the response letter is more akin to agreeing that Adolor has correctly filed all the documents and is not a judgment on the contents of those documents. 

The agency granted a six-month class 2 review for Entereg. This puts Feb. 10 as the date by which the agency aims to make a decision on the drug. Investors should mark their calendars, as there's still plenty more volatility ahead with shares of Adolor.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a healthy disclosure policy.