It’s been a rough week or so for the pharmaceuticals sector, with disappointing developments predominating over new drug approvals.
Cephalon (NASD: CEPH) got a one-two punch from the U.S. government, FiercePharma reports. The Food and Drug Administration refused to approve the alertness drug Nuvigil to fight jet lag, a key element of the company’s strategy for switching patients to the new med from its predecessor Provigil. Next, a federal judge refused to dismiss antitrust suits filed against Cephalon by the Federal Trade Commission and others. Soleil Securities had been hoping for good news for Cephalon, reiterating its “Buy” recommendation in anticipation of FDA approval.
Things are going from bad to worse at Boston Scientific Corp (NYSE: BSX): according to Wall Street Journal the company is under investigation by the Securities and Exchange Commission and the Department of Justice over its recent recall of heart defibrillators. (See our recent Pulse Check on Boston Scientific here.)
It’s been a rollercoaster ride for ARCA Biopharma (NASD: ABIO), whose shares soared more than 200% on Friday, only to lose 25% of their value on Monday. While the 200% increase can be tied to issuance of a patent, reasons for the 25% pullback are still unclear. TheStreet’s Adam Feuerstein believes it might be related to the company’s heart failure drug bucindolol, which needs FDA signoff on a special protocol assessment for a proposed late stage study.
Sally Church, on the Pharma Strategy Blog, notes that Antisoma & Novartis lung cancer drug ASA404 halted its phase III trials following interim analysis, an ominous sign for the drug. As Church points out, “It’s been a tough year for cancer drugs in lung cancer in 2010 already, following several spectacular rounds of futile data from Pfizer’s figitimumab, Novelos’s NOV-002 and now ASA404, all of which had promising but early data in phase II, only to stumble in phase III.”
Genzyme’s (NASD: GENZ)) troubles also are mounting. Morningstar reports that the FDA will likely issue a consent decree targeted at Genzyme’s Allston Landing facility. That’s the facility which experienced viral contamination last summer, leading to a brief shutdown of operations.
On the plus side of the ledger, Vivus (NASD: VVUS) announced that an FDA panel will be reviewing its obesity candidate, Qnexa. In a note, Leerink Swann analyst Steve Yoo suggests that Vivus and Arena will probably both get their drugs reviewed by an advisory committee at the same time.
All this does not bode well for Big Pharma: Bristol Myers Squibb (NYSE: BMY), Eli Lilly (NYSE:LLY), AstraZeneca (NYSE:AZN)and Sanofi Aventis (NYSE:SNY) must all develop a strategy to counteract major patent expirations and slowing growth. “Those companies are all betting on their pipelines. At this juncture, they feel that their pipelines can sustain them. That remains to be seen,” said Deutsche Bank analyst Barbara Ryan.