Zeltia stock craters as FDA advisors reject Yondelis

An FDA advisory committee has handed Spain's Zeltia a crushing blow, deciding against a combination therapy that includes its lead cancer drug Yondelis (trabectedin) by a vote of 14 to 1. The news cost Zeltia 35 percent of its share price.

The FDA doesn't have to follow the advisory committee's vote. But with the overwhelming majority of the agency's experts turning their thumbs down, it's hard for the analysts to see how Yondelis could gain an approval for ovarian cancer at this stage.

"The news is devastating for [Zeltia], because although the panel's ruling is not binding, the FDA has never approved a drug with such an adverse ruling," the Banesto brokerage wrote.

For many analysts, the writing was on the wall several days ago, when FDA staffers unveiled some deep concerns about the data for Yondelis and the appearance the drug is linked to serious side effects. The regulators asked the advisors if the risk of added toxicity was worth the possible benefit: six weeks of delayed disease progression. The advisory group concurred with staffers' that the combination of Yondelis and J&J's Doxil didn't demonstrate a favorable risk-benefit analysis. Zeltia did recently win an approval for Yondelis in the Philippines, but it's the U.S. and European markets that will dictate its ultimate success--or failure.

- read the report from Dow Jones