Washington Editor

The FDA's request for more safety data on Pozen Inc.'s investigational migraine drug Trexima cut the company's stock value by 60 percent Friday.

The agency could mandate more studies or request a reanalysis of existing data, meaning that the product's potential approval is facing a significant delay, as are any potential sales. As a result, Pozen's shares (NASDAQ:POZN) took it on the chin, plummeting $8.59, to $5.52.

"The fast money is out of the stock," said Ken Trbovich, an analyst with RBC Capital Markets. "They're going to sell the stock and not look back."

Trbovich noted the likelihood of a delay ranging between 12 months and 18 months, at a minimum.

In that period, Chapel Hill, N.C.-based Pozen and partner GlaxoSmithKline plc will meet with the FDA to discuss the approvable letter and determine the next steps to gain full clearance, whether to repackage existing data or get into additional trials.

"We don't think that there's a quick solution," he said.

Company officers did not return calls seeking comment.

Regardless of which scenario plays out, Trbovich noted the significance of the FDA's acceptance of Trexima's effectiveness. "With the FDA, it's efficacy and safety," he told BioWorld Today. "Here, you've got one of the two boxes checked."

Still, the uncertainty around the agency's safety concerns represents a noteworthy question mark. "Oftentimes, the companies are less willing to talk about what the issues are," said Trbovich, though he optimistically added that "it's unreasonable to believe" that Trexima's risk would extend to the general population. Instead, he suggested that the FDA might be concerned about a signal seen in a particular subset of patients, which could lead to a restricted label, at worst.

Trexima, which combines 85 mg of sumatriptan with 500 mg of naproxen sodium in a single tablet, is designed to treat dual mechanisms of migraine: inflammation and vasodilation. Sumatriptan is the active ingredient in GSK's Imitrex, the market-leading acute migraine treatment. Naproxen sodium is a non-steroidal anti-inflammatory drug found in many over-the-counter pain relievers.

Trexima, formerly called MT 400, is formulated with GSK's RT Technology. Trbovich said he expects that despite the setback, the London-based pharmaceutical firm would stand behind the product because it "represents the best opportunity" to retain control of the migraine market after Imitrex loses significant patent protection in three years. More than 28 million people in the U.S. are believed to suffer migraines.

For Pozen, the migraine drug setback is not a first. Less than a year ago, the company dropped another migraine drug from its stable, MT 100. After receiving a not-approvable letter from the FDA, a subsequent advisory panel called for more data because of safety concerns related to one of the product's components, metoclopramide. That product received approval in the UK last fall, however. (See BioWorld Today, Aug. 5, 2005, and Aug. 8, 2005.)

The stock drop stands in stark contrast to a 68 percent gain last year on Phase III data showing that Trexima met all regulatory endpoints in the second of two pivotal trials. Of particular note, the product demonstrated a superior sustained pain-free response compared to naproxen (p<0.001) and sumatriptan (p=0.009). (See BioWorld Today, April 22, 2005.)

Pozen submitted Trexima's new drug application late last summer, and pocketed a $20 million milestone payment from GSK when the FDA agreed to review the NDA. The companies' potential $160 million licensing deal dates back three years. (See BioWorld Today, June 13, 2003, and Aug. 9, 2005.)

But the delay will cost Pozen two previously anticipated $10 million milestone payments in connection with the Trexima collaboration: one for its approval and the other for its launch.

Missing out on that money in the near term could force the company to seek more cash to fund its other operations, either by reworking its collaboration with GSK to receive some funding early (possibly at the expense of future rewards) or through an equity financing (with a dilutive downside). Pozen posted a $6.4 million net loss in the quarter ended March 31, at which time it had $39.6 million in cash reserves.

Despite such fiscal question marks and the present safety ambiguity, RBC is maintaining its present rating on Pozen's stock on the basis of Trexima's long-term projections. Trbovich, who does not own any shares in the company, noted that New York-based RBC makes a market in the stock but does not have an investment banking relationship with Pozen.

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