By the end of 2007, the number of employees will drop from 196 to 35. The FDA sent an approvable letter for Preos in 2006, but it is asking for another clinical trial that will clarify the cost/benefit analysis of the drug. Although Preos is effective, it was shown to cause hypercalcemia. The cut-backs will reduce NPS’ cash burn from $113 million to $90 million. Preos is approved in Europe, where it is marketed by Nycomed.
NPS also has teduglutide, a treatment for Short Bowl Syndrome, in Phase III trials. NPS says it is looking for partners for both drugs. In mid-2006, NPS laid off half of its staff as it got rid of a marketing operation when Preos was not fully approved by the FDA. The company ended 2006 with $146 million in cash, and it has a market cap of $167 million. Despite the negative news, NPS rose 4 cents to $3.69.
Lilly (NYSE:LLY) withdrew its request for European approval of Arxxont (Ark-zont), an eye drug for blindness caused by diabetic retinopathy. On Tuesday, the FDA rejected an appeal from Lilly, asking that the FDA reconsider the drug without a three-year study. In September, 2006, the FDA sent an approvable letter for Arxxont, but asked for the additional trial.
Ortho-McNeil, a division of Johnson & Johnson (NYSE:JNJ), won a six-month extension of its marketing exclusivity for Levaquin, a treatment for community-acquired pneumonia and recurrent acute otitis media. The company received the extension, which takes the exclusive period out from December 2010 to June 2011, by receiving an additional indication on the drug for children and adolescents. The drug has been on the market since 1996.
The FDA will require Sepracor (SEPR) and Sanofi-Aventis (NYSE:SNY) to put warnings on their blockbuster sedatives Lunestra and Ambien, cautioning that the drugs cause rare, but serious, cases that were similar to sleepwalking, though potentially more serious. People have been discovered to be driving while “asleep” and binge eating and even one case of a woman who woke up after painting her front door (was the color right?). Anecdotally, it seems that many of the cases involve taking a small amount of alcohol before the sleeping drug. The new warnings will also be put on drugs from Abbott (NYSE:ABT), Takeda, and Tyco (NYSE:TYC).
Oscient (OSCI) fell lower after it proposed to float $185.5 million in new 3.5% convertible notes to take the place of older issues. The company will also offer an additional $30 million in new notes. All of the issues mature in 2011. Oscient fell 31 cents to $4.11.
For all practical purposes, biotech ended the day where it began the session. The Centient Biotech 200™ eked out a small fractional gain to end at 3806, a rise of .01%. The S&P 500 rose .37% and Nasdaq was higher by .29%.