Seeking Alpha
, stockmatusow (979 clicks)
Long/short equity, deep value, value, research analyst
Profile| Send Message|
( followers)  

In a February 27, 2012 article I gave a small list of bio-pharma companies with their drugs that were facing FDA decisions for approval or rejection. I gave FDA decision predictions for each drug. In this article, we will see how my predictions panned out. At the end of this article, I list one more company I feel investors should keep a close eye on as well.

Columbia Labs (NASDAQ:CBRX)

Drug: CRINONE (progesterone gel)

CRINONE 8% is a vaginal progesterone gel utilizing our sustained-release bio-adhesive technology indicated for progesterone supplementation or replacement as part of an Assisted Reproductive Technology treatment for infertile women with a progesterone deficiency.

On January 23, an FDA advisory committee recommended that CRINONE not be approved for the indication in which it was created. The final FDA decision is expected this week, and the prospects do not look good for approval here.

The company also has a class action suit filed against it for share holders who have lost a ton of money in the stock. The stock was as high as $4.32 before plummeting all the way down to around $0.60.

My verdict: Stay away for now as CRINONE will not be approved, notwithstanding several potential legal issues the company is currently facing.

FDA decision result: Rejection. This was an easy call as an FDA advisory committee advised the full FDA panel to reject the drug.

Discovery Labs (NASDAQ:DSCO)

Drug: Surfaxin

Surfaxin is a liquid instillate formulation targeting Respiratory Distress Syndrome. In April 2009, Discovery Labs received from the FDA a Complete Response Letter (CRL) which contained the requirements that must be addressed to gain U.S. marketing approval for the drug. This marks the 4th time since 2004 the company has received a CRL from The FDA in regards to Surfaxin.

On September 2, 2011, Discovery Labs submitted its Complete Response to the 2009 CRL. Is the 4th time a charm?

Sufaxin has an upcoming PDUFA data of March 6, 2012.

My verdict: The company received its last CRL on Sufaxin that raised questions about certain aspects of a quality control stability and release test. In my opinion, this is the last minor hurdle that I am confident the company has finally cleared, therefore I believe the 4th time will be the charm for Sufaxin.

FDA decision result: Approval. I correctly predicted this one which was a little bit harder to predict than the call on Columbia. Although Sufaxin is not expected to be a huge revenue generator for Discovery Labs, it does set a prescendent for the company's other drugs in its pipeline, including Sufaxin LS, which is touted as an improvement on Sufaxin.

Astex Pharma (NASDAQ:ASTX)

Drug: Dacogen

Dacogen (decitabine) is a DNA Injectable hypomethylating agent currently FDA approved for the treatment of myelodysplastic syndromes (MDS).

However, in early February of this year, The Oncologic Drugs Advisory Committee voted 10-to-3 against recommending Dacogen as a treatment for acute myeloid leukemia (AML) for patients over the age of 65. It is not likely The FDA will approve the drug for AML, but being already approved for MDS, and with several other drugs in their pipeline and strong partnerships, Astex may still be a decent swing trade at its current price of $1.96.

My verdict: Dacogen will not gain approval for AML treatment in The United States this time around.

FDA decision result: Dacogen was rejected by the FDA for the treatment of AML. The Oncologic Drugs Advisory Committee advised the FDA decision makers to reject this drug prior, so my call here was an easy one.

Affymax (OTCPK:AFFY)

Drug: Peginesatide

Peginesatide is designed to treat anemia associated with chronic renal failure. Hematide is a synthetic peptide-based erythropoiesis stimulating agent designed to stimulate production of red blood cells

On December 8th, 2011, The Oncologic Drugs Advisory Committee voted 15 to 1, with 1 abstention, that Peginesatide demonstrated a favorable benefit/risk profile for use in the treatment of dialysis patients with anemia due to chronic kidney disease. The scheduled PDUFA date for Peginesatide is March 27, 2012.

My verdict: Peginesatide will be approved by The FDA for the treatment the drug is indicated for.

FDA decision result: Approval. Again, not such a hard call as The Oncologic Drugs Advisory Committee recommended the drug be approved.

I recently bought some shares of Horizon Pharma (NASDAQ:HZNP) as I believe its drug LODOTRA will gain FDA approval in July of this year.

LODOTRA is a proprietary modified delayed-release formulation of prednisone, for the treatment of rheumatoid arthritis in adults, and has been assigned a PDUFA date of July 26, 2012.

This one is a few months away from approval, but the stock price has based. Therefore, this might be a good time to buy and hold for a swing trade for the run up that normally occurs before the actual approval date.

I recently remarked in another article of mine that I was astonished at the amount of shares insiders have been buying lately.

*TypeLast 3 Mo.Last 12 Mo.
Number of Insider Trades827
Number of Buys827
Number of Sells
Net Activity7,932,13325,387,959
Total Shares Traded:7,932,13325,387,959
Number of Shares Bought:7,932,13325,387,959
Number of Shares Sold:

These huge insider buys suggests to me they are confident in LODOTRA gaining approval in July; So am I, notwithstanding some data I have seen on this drug to further support this view. I will have an article next week that gets a bit more in-depth on this

*Data sourced from Nasdaq.com

Disclaimer: This article is intended for informational and entertainment use only and should not be construed as professional investment advice. Always do you own complete due diligence before buying and selling any stock.

Source: Bio-Pharma Drug Approval Watch List: Final Results Plus One To Watch