Image via CrunchBaseI quietly predicted today's FDA outcome on Alexza and Jazz Pharma's CRL, last week in my FDA Calendar prediction. Here were My Predictions which stated that investor's should be shorting Alexza last week. That would have netted a huge profit on Alexza's demise. I think that shorting stocks or place put call options on FDA catalyst events can be profitable if done properly. Although Jazz did not go down today, I do not see good things for their future
You really have to know what you are doing though when you make projections like this as is the drugs are approved then you will not be too happy with the results. It's really a difficult line to cross but I see the value of Shorting Stocks under the Obama FDA panel. The panel has rejected 4 drugs so far in October.
That doesn't mean that you should have shorted Hospira or Human Genome Sciences (HGSI) because these are large and mid cap stocks that are affected less by these FDA decisions. Human Genome has an upcoming drug approval in December for their Lupus therapy and I actually like the stock right now and consider it a buy. Alexza and Jazz just had too many red flags for me for approvals. You have to do your homework and look through the clinical trial data available. Or just follow BioPharma Investor and let me give you helpful advice on these decision.
Wikinvest--Alexza Pharmaceuticals (ALXA) Closed: 1.35 Down 1.65 for a 54.46% Loss
Wikinvest--Jazz Pharmaceuticals (JAZZ) Jazz will probably will be going down with today's CRL.
Jazz Pharmaceuticals Receives FDA Complete Response Letter Regarding JZP-6 for Treatment of Fibromyalgia
FDA O-Fer October Drug Approvals
BOSTON (TheStreet) -- U.S. regulators have to approve at least one new drug in October, right?
The U.S. Food and Drug Administration has a perfect 0-4 record so far this month -- four drug approval decisions, four drug rejections. Monday, Alexza Pharmaceuticals(ALXA) and Jazz Pharmaceuticals(JAZZ) received the bad news. Last week, it was FDA rejections for Human Genome Sciences(HGSI) and Hospira(HSP).
Perhaps the best shot for more positive news will come Tuesday when Alkermes(ALKS) is expecting FDA to rule on its drug for opioid addiction.
Alexza's market value was sliced in half Monday, with the stock at $1.37, after the FDA raised questions about the safety and manufacturing of AZ-004, a drug/device combination for the treatment of schizophrenia and bipolar disorder.
After listening to Alexza's conference call, it sounds like the FDA's list of issues with ZA-004 are long and not necessarily easy to resolve, at least without time and money.
AZ-004 is a small, handheld device that delivers a rapid, single, inhaled dose of the antipsychotic drug loxapine into the lungs of patients. The FDA, however, raised concerns about the potential for AZ-004 to interfere with lung function, while the agency's medical device division is concerned about how the drug inhalation device -- dubbed "Staccato" -- is manufactured.
Perhaps most troubling was the revelation that some of the lung safety concerns cropped up in patients who used the Staccato device to deliver a placebo.
Given this safety concern, analysts on Alexza's conference call Monday asked whether FDA was questioning the approvability of the company's entire drug delivery technology platform. Alexza is developing the Staccato handheld inhaler for use with a variety of drugs to treat diseases like migraine headaches, anxiety and breakthrough cancer pain.
Alexza management had little comfort for uneasy investors Monday because the company has yet to speak with the FDA about AZ-004 rejection. The company did say that FDA concerns about the lung safety of AZ-004 were surprising because the issue did not come up during the drug-device's review cycle.
Alexza is partnered with Valeant Pharmaceuticals (VRX), but Valeant is not on the hook financially until AZ-004 is approved. That leaves the responsibility for paying for any additional AZ-004 pre-approval work entirely in Alexza's lap. If the AZ-004 delay drags on, Valeant can walk away from the partnership without having to pay another dime.
If investors are giving Alexza the cold shoulder, they seem quite pleased -- or at least nonplussed -- with FDA's decision to deny Jazz Pharmaceuticals the opportunity to expand the marketing of Xyrem/JZP-6 into fibromyalgia.
Alexza Pharm: FDA Doesn't Approve AZ-004
MOUNTAIN VIEW, Calif. (TheStreet) -- U.S. drug regulators refused to approve Alexza Pharmaceuticals' (ALXA) new drug/device combination for the treatment of schizophrenia and bipolar disorder, the company said Monday.
The U.S. Food and Drug Administration, in its complete response letter, cited lung safety concerns as the primary reason for why Alexa's AZP-004 was not approvable at this time, Alexza said.
AZP-006 is a small, handheld device that delivers an inhaled dose of the antipsychotic drug loxapine into the lungs of patients. AZP-004 is being developed for the rapid treatment of agitation in schizophrenia or bipolar disorder patients.
Valeant Pharmaceuticals(VRX) is the co-marketing partner for AZP-004.
Alexza said FDA was concerned mostly about early safety data in which healthy patients as well as those with asthma and some chronic respiratory disease were shown to exhibit decreased lung function after using AZP-004. The decreased lung function was also picked up in studies where the AZP-004 device was used with a placebo.
No serious or severe respiratory adverse events were reported in these trials or in the two Phase 3 clinical trials of AZ-004, Alexza said.
FDA's medical device division also raised questions about AZ-004.
"We are reviewing the complete response letter and plan to meet with the FDA as soon as possible to discuss the Agency's pulmonary safety concern," said Alexza CEO Tom King, in a statement. "Alexza shares the agency's deep interest in patient safety, and believes the pulmonary data is supportive of the safety of AZ-004."
Alexza shares closed Friday at $3.03.
--Written by Adam Feuerstein in Boston.
NEW YORK (TheStreet) -- Alexza Pharmaceuticals (ALXA) had the most unfortunate story in the biotech library Monday, as investors stripped more than half the market cap from the company's stock after the Food and Drug Administration denied approval of Alexza's treatment for schizophrenia and bipolar disorder.
Called AZ-004 and co-marketed with Valeant Pharmaceuticals (VRX), the treatment takes a generic drug called loxapine and delivers it to patients through an inhaler.
The FDA, however, said it had safety concerns about how the inhaled doses affected the lungs. Some patients in Phase 1 trials exhibited decreased pulmonary function, the FDA said.
In frantic trading Monday, Alexza shares ended the session at $1.38, down $1.65, or 54.4%. Volume exceeded 16 million shares, more than 20 times the daily average turnover in the name.
Elsewhere in the biotech sector, stocks were trading mixed. The Nasdaq Biotechnology Index declined 2.35 points to 908.39.
Among notable gainers, Geron (GERN) shares rose 6.4% to $5.67 on heavy volume after the company announced it had launched a Phase 1 human clinical trial of a stem-cell-based treatment for spinal cord injuries.
The study is seminal -- and not just for the controversial Geron. The study marks the first time that stem cells removed from a human embryo will be tested in a human being. Geron's hope is that the cells will fix spinal nerve damage soon after injuries occur, thereby avoiding permanent paralysis.
The Geron trial comes after political skirmishing at the highest levels. Former President George W. Bush had famously placed restrictions on the use of federal funds for stem-cell research -- restrictions lifted by President Obama and upheld by a U.S. appeals court in September. Development of the Geron drug has partly been funded by a handful of states that rebelled against Bush's restrictions and offered grants on their own.
Among other winners in the land of experimental medicines, Pozen (POZN) saw its shares rise steeply Monday after the European Union approved the company's pain reliever Vimovo for sale on the Continent. AstraZenca (AZN) is Pozen's partner in the development of the drug, which combines naproxen with the British pharma giant's heartburn blockbuster Nexium.
Pozen shares closed the session at $7.29, up 7.5%.
Good news in the regulatory arena helped other stocks as well. Warner Chilcott(WCRX), the Irish drug company, received the FDA OK for its osteoporosis treatment Atelvia, acquired from Procter & Gamble(PG) in 2009, along with a suite of other related drugs.
Warner expects to begin selling the Atelvia tablets in the first part of 2011.
The stock finished at $23.88 Monday, up 7.2% on volume of 6.6 million shares, more than triple the daily average.
No biotech decliners could come close to matching the doozy of Alexza's collapse Monday, though several lightly traded small-caps in the sector retreated sharply in busy trading.
Shares of Optimer Pharmaceuticals(OPTR), a San Diego-based firm trying to develop antibiotics to treat stomach viruses, fell 5.5% to $9.33 on no apparent stock-moving news.
An article on Forbes' Web site Monday noted that the company, led by an ex-Pfizer executive named Pedro Lichtinger, is among a small group of biotech shops attempting to develop antibiotics that will kill bacteria increasingly resistant to standard drugs.
Elsewhere, shares of Obagi Medial Products(O), a developer of skin-care products, were retreating nearly 6% on brisker-than-average volume Monday after the firm said its CEO, Steve Carlson, was resigning.
No reason was given, and the uncertainty appears to have spooked the market.
Until the company finds a new chief executive, it will hand the reins to Al Hummel, currently the CEO of Chicago biotech Cobreck Pharmaceuticals. Hummel has been an Obagi director since 2005.
Obagi shares closed at $10.50, down 5.9%, on volume of about 196,000 shares. Average daily turnover is 74,000.
-- Written by Scott Eden in New York