Shares of painkiller manufacturer Pozen Inc. plunged 43% to close at $9.93 Thursday after the FDA declined for the second time in a year to approve its migraine drug Trexima. This was the shares' steepest fall since they plummeted 61% the last time the FDA delayed the drug's approval. The agency is concerned that an early study, in which megadoses of Trexima were given to Chinese hamsters, suggested a possible cancer risk. It has instructed Pozen and its partner, GlaxoSmithKline, to provide more data, which might require a new test on humans. Trexima, a combination of Glaxo's Imitrex and the over-the-counter painkiller naproxen, has already completed all three human trials usually required for approval. The companies hope to get the drug to market before 2008, when a generic version of Imitrex will be released. Glaxo is faced with looming generic competition on several fronts as patents expire, and has seen its share price drop 13% since its diabetes drug Avandia was linked to heart attack risk three months ago. "We all know it's a difficult regulatory environment," said Pozen CEO John Plachetka. "We see examples of it every day. Given where the agency is today they might wanna be in a position to say, 'Yeah, we ran it (the Chinese hamster issue) down'."
Sources: Wall Street Journal, CNBC.com, Bloomberg, TheStreet.com
Commentary: JAMA: GlaxoSmithKline-Pozen Combination Treatment Increases Anti-Migraine Effectiveness • Pozen's Trexima Begins Six Month FDA Review • Pozen: On Track With New Pain Medications
Stocks/ETFs to watch: GSK, POZN. Competitors: AZN, ENDP, NVS, SNY. ETFs: EKH, OTP, ADRU
Earnings call transcripts: GlaxoSmithKline Q2 2007
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