13 Extreme FDA Trades

by: Mike Havrilla

Below are 13 companies with market caps below $200M which have pending new drug product decisions with the FDA that are expected to have a major impact on each of the underlying stock prices as the PDUFA decision dates approach and the decision is ultimately announced. A high risk/reward trading approach to consider for speculative traders is investing a small amount of money that you can afford to lose in a basket of stocks included in Extreme FDA and Clinical Trial Calendar Trades, which are highlighted in periodic articles at BioMedReports.com.

Keep in mind that there is no need to hold through the actual decision date as it is possible to take advantage of the upward stock price momentum that often develops as the decision date nears if you establish a position a few months ahead of time. Although this approach limits the upside, the downside risk is virtually eliminated since it is unlikely a company with a pending FDA new product decision will drop substantially ahead of its FDA decision unless unrelated bad news occurs or the agency issues a surprise negative decision ahead of time.

ARCA biopharma (NASDAQ:ABIO): On 6/1/09, ABIO announced that it received a Complete Response Letter (CRL) from the FDA for its Gencaro (bucindolol) NDA for the treatment of patients with chronic heart failure. The FDA states that it cannot approve the NDA in its current form and specifies additional actions and information required by the Agency for approval of the Gencaro NDA. The Agency acknowledges that several substantial amendments to the NDA submitted by the Company in May 2009 were not reviewed or considered by the FDA in issuing the CRL, and that these amendments may be referenced in the Company’s response to the CRL.

Among other things, the CRL states that the Company must undertake the following actions to obtain approval: (1) Conduct an additional clinical efficacy trial of Gencaro in patients with heart failure; (2) Conduct additional clinical pharmacology studies to address drug-drug interaction and pharmacokinetic issues; and (3) Conduct additional non-clinical studies to further characterize Gencaro metabolites. ABIO believes that data and information submitted to FDA in May 2009 (which was not reviewed by the FDA before issuing the CRL) may address several of the deficiencies raised by FDA and may limit the need for some of the actions specified in the letter.

Advanced Life Sciences (OTC:ADLS): ADLS has a pending NDA for cethromycin as a once-daily antibiotic for the treatment of adults with mild to moderate community acquired pneumonia with a PDUFA decision date of 7/31/09. Also, the Anti-Infective Drugs Advisory Committee of the FDA is scheduled to meet on 6/2/09 to discuss the NDA for cethromycin and provide a recommendation for the final FDA approval decision. Briefing documents for the panel meeting can be accessed at this link. Click here for a recent overview article on ADLS at BioMedReports.com.

Hemispherx Biopharma (AMEX:HEB): Ampligen (Poly I: Poly C12U) NDA (three month PDUFA decision date delay was announced on 2/18/09 as additional data was submitted by HEB within three months of original decision date). Ampligen is an experimental treatment for chronic fatigue syndrome (which has no FDA-approved treatments) and the drug has an Orphan Drug Status with an original PDUFA decision date of 5/25/09. On 5/26/09, HEB announced that the FDA advised the Company that it may require up to 1-2 additional weeks to take action on the Ampligen NDA. Click here for links to articles and interview coverage of HEB at BioMedReports.com.

BioDelivery Sciences (NASDAQ:BDSI): Onsolis (BEMA fentanyl) NDA Re-Submission for breakthrough cancer pain with an expected decision by Monday 6/15/09 and a $27M milestone payment if approved from partner Meda AB. Onsolis is a small/dissolving polymer delivery system with opiate painkiller fentanyl designed for quick absorption through the cheek. BDSI submitted a Risk Evaluation and Mitigation Strategy (REMS) for Onsolis last December based on the feedback it received from a complete response ruling by the FDA in August 2008. Since the FDA has informed BDSI that all other aspects of the NDA review are complete, the prospects for Onsolis approval are excellent, with an approval decision possible by mid-June based on a Class II (six-month) review by the agency on the re-submission.

ISTA Pharma (NASDAQ:ISTA): On 6/1/09, ISTA announced the Dermatologic and Ophthalmic Drugs Advisory Committee will review ISTA's New Drug Application (NDA) for Bepreve(TM) (bepotastine ophthalmic solution) on June 26, 2009. Last November, ISTA announced it had filed its NDA with the FDA for Bepreve as an eye drop treatment for ocular itching associated with allergic conjunctivitis. As bepotastine is a new chemical entity in the U.S., ISTA expected an Advisory Committee would be convened for Bepreve. ISTA continues to expect a standard review of ten months and has been given a PDUFA decision date of 9/12/09 for the FDA to complete its review of the pending NDA.

Spectrum Pharma (NASDAQ:SPPI): SPPI is a dual extreme trade with two pending decisions at the FDA. Zevalin sBLA (priority review) to expand the approved label to include consolidation therapy for follicular B-cell non-Hodgkin's lymphoma if a first-line treatment response is achieved with an expected PDUFA decision date of 7/2/09. SPPI also has a pending sNDA for Fusilev (levoleucovorin) for Injection to expand use of the drug in combination with 5-FU containing regimens in advanced metastatic colorectal cancer. The PDUFA decision date for the sNDA is 10/8/09.

Labopharm (NASDAQ:DDSS): A decision date of 7/18/09 is looming for the Company's rapid-onset formulation of trazodone (DDS-04A) for the treatment of depression through the 505(b)(2) regulatory pathway for new formulations drugs that are already on the market.

Transcept Pharma (NASDAQ:TSPT): An expected PDUFA decision date of 7/30/09 is pending for Intermezzo (zolpidem sublingual lozenge) NDA for use as-needed to treat insomnia from middle of the night awakenings.

Nuvo Research (OTCPK:NRIFF): Expected PDUFA decision date of 8/5/09 for the Company's NDA re-submission for Pennsaid, which is a topical NSAID for arthritis pain and inflammation.

NeurogesX (NASDAQ:NGSX): On 5/21/09, NGSX announced that the European Commission has formally granted marketing authorization of Qutenza 179 mg cutaneous patch for the prescription-only treatment of peripheral neuropathic pain in non-diabetic adults either alone or in combination with other medicinal products for pain. The centralized marketing authorization allows Qutenza to be marketed in all 27 countries of the European Union.

Qutenza is a skin patch that is designed to locally deliver a high-concentration (8%) of the active substance capsaicin to provide sustained relief from peripheral nerve pain. NGSX expects to launch Qutenza in the E.U through a commercial partner in early 2010. In October 2008, the Company submitted a NDA to the FDA requesting marketing approval of Qutenza for the management of pain associated with postherpetic neuralgia (PHN) with an expected PDUFA decision date of 8/16/09.

Since NGSX used a 4% lidocaine cream to numb the area of skin prior to the application of Qutenza in order to reduce burning, the Company may be required to conduct a small study testing a FDA-approved topical anesthetic along with Qutenza prior to the FDA granting approval which could result in a delay to the mid-August PDUFA date by a few months. NGSX expects to provide clarity on the exact timeline in near-term based on the Company’s guidance during the 1Q09 earnings conference call in early May 2009.

On 4/6/09, Santarus (NASDAQ:SNTS) filed a NDA for a new tablet formulation to add to its Zegerid family of branded prescription pharmaceutical products. Pursuant to PDUFA guidelines, SNTS expects the FDA will complete its review or otherwise respond to the NDA by 12/4/09. The NDA was submitted under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act. In connection with the FDA’s acceptance for filing of the NDA for a new tablet formulation, Santarus is providing notice to the NDA holder for Prilosec (omeprazole) delayed-release capsules and related patent holders that the new tablet formulation does not infringe the patents listed in the Orange Book for Prilosec or that those patents are invalid.

Vion Pharma (OTC:VION): Onrigin (laromustine) Injection (formerly known as Cloretazine or VNP40101M) NDA requesting approval as a single agent for remission induction treatment for patients age 60 and older with de novo poor-risk acute myeloid leukemia (AML). The NDA will receive a standard (10-month) review by the FDA with an expected PDUFA decision date deadline of 12/12/09.

On 5/18/09, A.P. Pharma (NASDAQ:APPA) announced that it submitted a NDA for its lead product (APF530) to the FDA for the prevention of chemotherapy-induced nausea and vomiting. APF530 is a long-acting formulation of granisetron that utilizes the Company’s proprietary Biochronomer drug delivery system. The NDA was submitted under section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, whereby the Company can rely upon the FDA’s prior safety and efficacy findings for APF530's active ingredient, granisetron (which is already approved and marketed as Kytril).

The FDA is expected to determine whether to accept the NDA for filing within 60 days, and to notify the Company of its determination within 14 days thereafter. If the NDA is accepted for filing, under the Prescription Drug User Fee Act (PDUFA) guidelines, it is expected that the FDA will complete its review and provide an action letter with respect to the NDA within 10 months following NDA submission.

On 6/1/09, Theratechnologies (OTC:THTCF) announced that it filed a NDA with the FDA for tesamorelin, an analogue of the growth hormone releasing factor, proposed for the treatment of excess abdominal fat in HIV patients with lipodystrophy. Several factors including the antiretroviral drug regimen and the virus itself are thought to contribute to HIV-associated lipodystrophy, which is characterized by body composition changes, dyslipidemia and glucose intolerance. The changes in body composition include excess abdominal fat accumulation. There is currently no approved treatment available for the excess abdominal fat related to HIV-associated lipodystrophy, a condition that can stigmatize patients and discourage HIV treatment adherence.

Disclosure: No positions.

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