FDA Alert: Three Drug Stocks To Watch
The
Endocrinologic and Metabolic Drugs Advisory Committee of the FDA will meet
from Jan. 13 – 15, 2003, to decide the fate of three new Biologics License Applications
that will have deep implications on the short-term financial outlook of three
companies.
On Monday, Jan. 13, the Advisory Committee will first decide whether
to approve the drug Fabrazyme, produced by
Genzyme
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Fabry’s Disease. Fabry’s Disease is a rare (8,000 patients in US), potentially
fatal inherited disease that results in the abnormal buildup of lipids in organs
and tissues, causing them to ultimately malfunction and die. There is currently
no effective treatment for this disease. In addition, the recent court setback
favoring Amgen’s patent of its blockbuster drug Epogen over Transkaryotic’s
Dynepo has created more negative apprehension over the upcoming FDA Advisory
Committee meeting.Â
Fabrazyme is designed reduce this lipid
buildup in organs and either stabilize or improve their function by replacing
the defective inherited enzyme present in the disease. Late-stage clinical
studies have supported the effectiveness of Fabrazyme to improve organ function
in Fabry’s patients and the drug has been approved in Europe for use.
However, the road to the Advisory Committee has not been smooth for Genzyme. The
initial meeting scheduled in September 2002 was postponed for no specified
reasons. A history of postponed meetings always causes a little apprehension
when a company’s drug finally gets center stage. Genzyme’s stock price has had a
nice run up from October to mid-December 2002 in anticipation of this upcoming
meeting. However, it gave back some of its gains in the later half of
December 2002. I suspect Genzyme’s Fabrazyme has a good chance of getting past
the FDA Committee’s scrutiny on Monday. Look for a flurry of activity as the
meeting gets close.
On
Tuesday, Jan. 14, the FDA’s Advisory Committee will meet again to decide the
fate of the competition, Transkaryotic’s
(
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disease. This drug’s function is similar to Genzyme’s drug Fabrazyme in reducing
the dangerous accumulation of lipids in tissues and organs.
However, unlike Genzyme’s drug, Transkaryotic’s Replagal had some problems in late-stage
clinical trials achieving statistically significant results in Fabry patients.
The FDA pointed this out in a letter last year notifying the company that the
current data is not acceptable for approval. This caused a major setback in the
company’s stock and short-term prognosis from which it has not recovered.
Hopefully, the company got the message, reanalyzed their data, and now is poised
to make their best case. However, past negative letters from the FDA always make
me nervous and may be prognostic of problems ahead.
On
Wednesday, Jan. 15, the FDA’s Advisory Committee will meet one more time to
decide the fate of Genzyme
(
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disorder results in an enzyme deficiency in the body, causing the accumulation
of complex carbohydrates in organs and tissues. This abnormal accumulation
chokes off the organs involved, leading to pulmonary and renal
failure. Aldurazyme was produced to replace this lost enzyme and improve the
function of the organs involved. The late-stage clinical trials looked good
and I suspect the FDA will look kindly on this drug.
BioMarin’s stock price
movement has mirrored that of Genzyme’s in anticipation of this meeting. Despite
the small market for this drug, look for a flurry of activity around both
companies early next week. Since BioMarin is a small company, approval may cause
much positive volatility as the meeting gets close. Most likely, trading may be
halted the day of the meeting.
Until next time,
Dr. Paul Ruggieri