A Drugmaker's Candid Thoughts on the FDA

Yesterday, development-stage specialty pharma Cardiome (Nasdaq: CRME) announced its year-end 2007 financial results and gave guidance for the future of its top two drugs.

Cardiome's chronic atrial fibrillation (irregular heart rhythm) treatment, oral vernakalant, produced positive interim phase 2b study results earlier this month. But the more interesting story belongs to Cardiome's intravenous vernakalant to treat acute atrial fibrillation.

Cardiome's intravenous (IV) vernakalant has been awaiting an FDA decision on its approval since its PDUFA date of Jan. 19. The FDA delaying approval of a drug is not so unusual; after all, dozens of drugs receive approvable letters every year. What has been so unusual is that although IV vernakalant was almost universally praised by its FDA reviewers and an advisory panel, Cardiome has yet to hear anything back from the FDA except that (as quoted by Cardiome yesterday) "a review is nearing completion and they regret the delay."

Cardiome did do one thing yesterday on its conference call that all investors should listen to. It gave a more macro view of the state of the FDA, based on its firsthand experience with the "new" FDA regulatory environment.

At around the nine-minute mark, one analyst asked whether other drugmakers were also experiencing the FDA's inability to review marketing applications in a timely manner. Here's Cardiome's President and Chief Business Officer, Doug Janzen:

I definitely think we, as in Cardiome, and everyone else in the industry is in a new precedent around (the) FDA. ... The FDA has actually come out and said it will be missing (PDUFA) dates ... I think everyone is in a brand new environment ... actually some of the old-timers in the industry are talking about we're back in the old environment where the FDA just doesn't deal with timelines ... from Cardiome's perspective we are in new territory. ... It seems every company we talk to has an FDA kind of story right now. They're missing PDUFA dates, they're missing type-C meetings, they're missing meetings to discuss protocol ... I think the whole industry is in a new environment with (the) FDA right now.

Drugmakers -- like Novartis (NYSE: NVS), with its experience in getting diabetes drug Galvus approved in the U.S., and Sanofi-Aventis (NYSE: SNY), with its weight-loss drug Zimulti -- would probably agree with Cardiome's assessment of the FDA. The takeaway for investors is that it's time to ratchet down expectation for new drug approvals and be ready for a new era in the pharmaceuticals industry.