Biotech Values

[DewDiligence]

Odds lengthen still further for oral Tazarotene in AMD:

[Today, the FDA rejected Allergan’s NDA for oral Tazarotene to treat psoriasis, and Allergan has stated that it will now hold off on submitting an NDA for the drug in acne. It’s reasonable to infer that Allergan’s oral Tazarotene program in AMD, which was in a much earlier stage of development than either psoriasis or acne, will also be placed on the back burner. Allergan is still pursing other programs in AMD, however (#msg-2276173).]

http://online.wsj.com/article/0,,SB109632652073329441,00.html?mod=yahoo_hs&ru=yahoo

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FDA Rejects Allergan's Proposal
To Market Oral Psoriasis Drug

By RHONDA L. RUNDLE
Staff Reporter of THE WALL STREET JOURNAL
September 28, 2004

Allergan Inc. said the Food and Drug Administration rejected its market application for an oral psoriasis drug, delaying its launch by at least a year and raising questions about the drug's future.

The specialty-drugs company, based in Irvine, Calif., is seeking to market tazarotene capsules, a more potent form of a retinoid drug that the company sells in cream and gel formulations. Analysts had anticipated commercial launch of the capsules early next year.

"I'm very surprised to see this response from the FDA because there's a perception among dermatologists that the drug is significantly safer than alternatives on the market," said Don Ellis, an analyst at Thomas Weisel Partners LLC in San Francisco. Retinoid drugs, used to treat psoriasis and acne, have potentially serious side effects, including birth defects in pregnant women.

Allergan said it received the FDA's "non-approvable letter" late Friday. The letter listed three issues, including development of an acceptable risk-management program for patients and correction of some manufacturing deficiencies. More important, the FDA asked the company to complete a "non-inferiority study" in severe psoriasis patients. Allergan said it will work with the agency to clarify the request.

The study would be one in which "we're asked to compare ourselves to another drug on the market," said Stephanie Fagan, an Allergan spokeswoman, who added that "we don't know what particular compound they are thinking of." Allergan said the requirement to conduct a supplemental study would postpone the drug's launch by at least a year.

Allergan's shares had strengthened recently in anticipation of FDA approval, but fell on news of the agency's letter. The shares fell as low as $74.50 in yesterday's trading, but recovered to $75.64 in 4 p.m. New York Stock Exchange composite trading, off 2.9%, or $2.25.

The request for an additional study is "a significant development obstacle," said Elliot Wilbur, an analyst at CIBC World Markets, in a research note to clients. The "future of [the drug] at this juncture remains highly uncertain," he said because of the need for "an additional and expensive" study "in a market where the only currently approved treatment, Connetics Corp.'s Soriatane, generates less than $50 million in sales."

Allergan has been testing oral tazarotene for acne, a condition that afflicts about 17 million people, or perhaps three times as many as psoriasis. Yesterday, however, the company said it isn't moving forward on the acne trials, pending clarification on the psoriasis application. At an FDA meeting earlier this year, participants noted that physicians might start prescribing oral tazarotene for acne after the drug received approval for psoriasis. Such off-label prescribing is a common and accepted medical practice.

Oral tazarotene sales could reach a peak of $200 million a year, according to Allergan estimates. Some analysts, however, have said that annual sales at maturity could be double that amount, or more, if the drug is approved.
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