Now, Salix just got moved to my list of companies with outstanding management teams.
Yesterday, the company announced that after talking with the FDA, it's pretty sure it will receive a complete response letter -- a euphemism for rejection -- from the agency. The FDA wants more information about re-treating patients.
In all my time covering drugmakers, I can only remember one other time that a company announced its expectation that the FDA would reject its drug: Human Genome Sciences
It's rather surprising that companies don't make announcements about their expectations more often. I've always assumed that the FDA keeps its cards close to its chest and doesn't let on that a company should expect a rejection.
For example, Amylin Pharmaceuticals'
I would just be clear that it was only on receipt of the complete response letter that we were truly aware that this was an approvability issue for the agency. The agency did request the tQT study that was done for Byetta during the timing of the review. This study was completed back in 2009. So, they certainly were reviewing it. However, we were not aware that this was an approvability issue until we received the complete response letter last night.
But Salix's and Human Genome's experiences would suggest that the FDA lets some drugmakers know when they shouldn't expect a positive response. One has to wonder whether some companies getting that information are withholding it, hoping that the FDA might change its mind.
If management can keep a secret, and it isn't selling shares on the information, trying to raise capital, or having any partnering discussions, then I guess it's O.K. to wait until it gets the final decision. But that's a heck of a lot of ands.
In my opinion, Salix made the right decision to inform investors when it did. Management's actions deserve our commendation.
Tim Beyers thinks it's OK for management to keep some secrets from investors.