Michelle SladeAssociate Editor
Collagen Corp.'s stock plummeted Tuesday after the FDA said itwill request additional data and analyses on the company'sContigen Bard Collagen implant product for urinary stressincontinence.
The Palo Alto, Calif.-based company's stock (NASDAQ:CGEN)closed Tuesday at $13.63, down $4.38 per share.
According to Collagen spokesman David Foster, the notificationfrom the FDA is at least a sign that Contigen is finally gettingsome attention. The company said the FDA had not respondedsince Collagen supplied the agency with additional clinicaldata in August 1991. The FDA requested the data in May 1991.
"The bad news is that we've been living in a vacuum for thepast 14 months," Foster said. "But the good news is that we'llfinally get some news from them."
"We haven't had any expectations as to when we would receivea response," he said. "With the changes at the FDA, itsimpossible to know what the normal process is."
Collagen said it expects to hear from the agency within thenext two weeks, but Foster said it's unclear as to the exactnature of the FDA's request.
Collagen's well-documented struggle with the FDA over itscollagen-based products during the past 18 months has drawncaution from the investment sector.
Carol Winslow, an analyst with Vector Securities Internationalin Deerfield, Ill, said Tuesday's announcement is a significantsetback for Collagen. "I'm not surprised," she said, "becausethey have been in fisticuffs with the FDA for a long time."
Winslow noted two major issues at stake for Collagen .
The first is a clear but broad concern by the FDA about thesafety of implantable and injectable materials, such assilicone and collagen used in other applications such as breastimplants. The second concerns the different treatments forincontinence, such as the less-invasive surgical procedures,which appear to be getting good results.
Kurt Kruger, an analyst with Hambrecht and Quist in New York,said that due to FDA delays it's unlikely the product willreceive FDA approval before mid-1993. "We'd anxiously beenawaiting Contigen's approval," he said. "It's been at the FDA fora couple of years now."
Foster told BioWorld that although both of Collagen's mostsignificant products for the next few years, Contigen andCollagraft (a bone-grafting product), are caught up in theregulatory process, he doesn't expect this to have a seriousfinancial impact on the company.
"Contigen is one we've relied on for big growth possibilities asa big-growth prospect for the company, but we're not a start-up company who needs cash," Foster said.
H&Q's Kruger said worldwide sales of Collagen's cosmeticsbusiness, the company's growth driver, dropped in fiscal 1992,indicating a flattening out of sales from this side of thecompany.
"I'm encouraging people to stay on the sidelines until we hearmore," he said.
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