Shares of Forest Laboratories slid this morning after investors got a chance to look over some of the FDA staff's skeptical questions for Daxas, a potential new blockbuster for smoker's lung that goes before an expert advisory panel on Wednesday.
A staff summary concluded that the COPD drug's ability to spur better lung function relative to a placebo was really "quite modest," while a slate of potential safety issues--gastrointestinal problems, potential carcinogenicity, pancreatitis and weight loss--could pose a hurdle for Forest, which is seeking an approval for Daxas alongside its partner, Nycomed. And the FDA raised another red flag, noting that there were three completed suicides in the drug group as well as two attempted suicides.
Forest shares had slipped three percent on the staff review, which typically takes a fairly skeptical view of all the new drugs that come its way. Nycomed completed four Phase III trials of Daxas and picked up a $100 million upfront from Forest for the licensing pact last summer. Forest also agreed to pay up to $500 million in milestones for the drug, which has the potential to earn blockbuster revenue if it can go on to compete with Advair--a drug that earned $6 billion in 2006.