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Bad news yesterday for companies developing new treatments for osteoarthritis (OA) seemed to have little effect on the companies affected. The news came courtesy of the FDA, which halted development of a class of compounds inhibiting the Nerve Growth Factor (NGF). Five companies were developing this class of compounds for treatment of pain associated with OA.

Pfizer (NYSE:PFE) was the first to stop its drug, tanezumab, in June of 2010. It was conducting studies in subjects with knee OA. Though the drug did very well in decreasing pain, there was an increase in rate of hip joint replacement in the experimental group compared to the placebo group. At that time, it was speculated that the drug was so effective that patients with OA forgot about their pain and started stressing their joints excessively. This lead to worsening cartilage degeneration or osteonecrosis of the hip. Amazingly enough, the trial was in subjects with OA of the knee, not hip. I have not seen the inclusion and exclusion criteria of the trial, but generally one excludes those patients with hip OA in a knee OA trial to avoid confounding factors.

Not much publicized was AstraZeneca’s (NYSE:AZN) halting of MEDI-578 in July, right after the Pfizer announcement.

On Dec 28, the FDA placed Johnson and Johnson’s (NYSE:JNJ) antibody to NGF, fulranumab, on clinical hold. That means no new patients can be recruited into the study. And Regeneron’s (NASDAQ:REGN) REGN475, that is being developed jointly with Sanofi Aventis (NYSE:SNY), was also placed on clinical hold. Apparently, there were similar cases of osteonecrosis of the hip in these drugs' ongoing studies that concerned the FDA.

That leaves only Abbott (NYSE:ABT) in the game with ABT-110 still in the clinic. It remains to be seen if this will become another COX2 story (with celebrex the only survivor). However, it is worth keeping in mind that the Abbott compound is also an antibody that it got last year from PanGenetics for $150 million. A hefty price to pay to play in the potential $11 billion market.

Disclosure: I am long JNJ.