Backlog of Decisions Is Building at the FDA

The accompanying table (click to enlarge) presents 70 FDA product approval decision dates along with the market caps and one year stock price change for the underlying companies. A note of caution for investors and traders is that the most common outcome from the FDA in the past year has been a delay in decisions due to understaffed conditions at the agency. However, several companies have pending decisions which are likely to occur either before year-end or early next year and will have a major impact on their stock prices.

Discovery Labs (DSCO) received word from the FDA yesterday after the market close that its complete response for Surfaxin was accepted, but the Class II review designation means that the decision date is pushed out to 4/17/09. Shares of DSCO are trading down sharply in after hours action by about 27%, around the same price ($1.30) they hit when the FDA issued an approvable ruling earlier this year in May. While a Class I review was widely expected, the sharp sell-off today could be a good opportunity to buy at a steep discount to the prices insiders have been accumulating shares in anticipation of Surfaxin approval.

Cypress Bio (CYPB) and Forest Labs (FRX) are awaiting a response from the FDA for milnacipran in the treatment of fibromyalgia, in addition to results from a Phase 3 trial of the drug for the same indication due before year-end. The FDA missed its October deadline for the decision, but issued a statement that it expects to resolve the outstanding issues in a "matter of weeks."

Pain Therapeutics (PTIE) and King Pharma (KG) are expecting a FDA decision for their abuse-resistant pain drug Remoxy, which as developed to counter diversion and misuse for the widely used opiate pain killer OxyContin. Also, Alpharma (ALO) has an expected decision date for its morphine-based, abuse-resistant pain drug Embeda due before year-end and has rejected an unsolicited takeover bid from King Pharma.

Eli Lilly (LLY) and Daiichi Sankyo (DSKYF.PK) are facing an unkown delay for their blood thinner Effient (prasugrel) which would compete with the multi-billion dollar drug Plavix. The decision was originally expected in late June and then delayed by three months and now the FDA has not issued a time frame for a decision due to the complexity and large size of the filing.

Savient Pharma (SVNT) plunged at the end of October on cardiovascular safety concerns for its gout drug Puricase, but has since rebounded, although the stock is down by 60% in the past year. Savient expects to hear back from the FDA by year-end on whether the agency will accept its BLA for Puricase and if it will be classified for a priority, six month review.

Glaxo (GSK) and Ligand Pharma (LGND) face an unknown delay on a decision for Promacta (eltrombopag) for the treatment of chronic idiopathic thrombocytopenic purpura (ITP). Promacta was endorsed by an FDA panel for short-term use this past summer and Amgen (AMGN) received FDA approval in late August for Npate as the first treatment for ITP.