Wyeth Whacked on Drug Setbacks

[Guest guest]

Wyeth Whacked on Drug SetbacksBy SteyerTheStreet.com Staff Reporter

8/10/2007 1:49 PM EDT

Shares of Wyeth (WYE - Cramer's Take - Stockpickr) sank Friday after the Food and Drug Administration rejected the company's application for a schizophrenia treatment and said more testing would be needed for approval. Separately, Wyeth and a partner stopped a midstage clinical trial combining an experimental drug with two existing treatments for Hepatitis C, a blood-borne viral infection caused primarily by needle-sharing among drug users. Some patients receiving the experimental drug had elevated liver enzymes, a signal for potential liver damage. Wyeth's stock fell $3.14, or 6.1%, to $46.44 by early afternoon on heavier-than-average volume, as Wyeth vowed to continue working on the schizophrenia drug. Shares of Wyeth's partner in the hepatitis C clinical trial, ViroPharma (VPHM - Cramer's Take - Stockpickr), plunged $2.04, or 20%, to $8.08. The biggest hit to Wyeth was the FDA's rejection of bifeprunox, a schizophrenia drug developed by Solvay, the Belgian chemicals and pharmaceuticals conglomerate, which signed a marketing and development deal with Wyeth in March 2004. The companies, which are working on two other anti-psychotic medications, say they will conduct an additional clinical trial to secure FDA support for bifeprunox as a maintenance treatment for schizophrenia. The test could take one to two years. "We believe that bifeprunox is a promising drug for the treatment of schizophrenia and that there is a need for new treatment options," said Dr. ce Downey, president and CEO of Solvay's U.S. prescription drugs business. "We will work with the FDA to address its comments and pursue the approval of bifeprunox as soon as possible." Stiles, Wyeth's chief medical officer, added that his company continues to "support the development of the compound and the approach" to treating schizophrenia. Although bifeprunox performed well vs. placebo in two clinical trials for treating acute cases of schizophrenia, the FDA determined that "the efficacy data, when compared to reference drugs, were not sufficient for approval," the companies said. The FDA wants more data about how the drug is processed in the body and more information on what the companies say is a "complex case" of a patient who died during one clinical trial. Wyeth and Solvay said their drug "demonstrated effectiveness" in one study gauging long-term maintenance for schizophrenia," but they must run another clinical trial to get FDA approval for a maintenance indications. They will meet with the FDA "to discuss study design and to assess how this additional study combined with ongoing and planned studies might support a maintenance indication." Bifeprunox belongs to a class of drugs called atypical anti-psychotics. Wyeth and Solvay were trying to position their compound as having fewer side effects, such as weight gain, than competitors in a crowded field, such as Zyprexa from Eli Lilly (LLY - Cramer's Take - Stockpickr) and Risperdal from & (JNJ - Cramer's Take - Stockpickr). Bifeprunox had already run into delays in the European Union. In November 2005, Solvay and its European partner, the Danish drugmaker H. Lundbeck said they would have to run another clinical trial "to satisfy European Union requirements." The EU drug application is scheduled to be submitted next year. As for the experimental hepatitis C drug, Wyeth and ViroPharma said 8% of patients receiving this compound plus two approved drugs had elevated levels of liver enzymes during a clinical trial. This indicator of liver damage was present in only 1% of patients receiving the two approved drugs, pegylated interferon and ribavirin, which are standard treatments for hepatitis C. The companies said the higher liver enzymes occurred after treatment of eight weeks or more. "This is a clear disappointment in light of the exciting antiviral activity observed to date in this study," said Michel de Rosen, ViroPharma's president and CEO, referring to the drug called HCV-796. The clinical trial represented the second of three rounds of human testing before a drug is submitted for regulatory review. The FDA's rejection of bifeprunox and the HCV-796 failure are just two of several setbacks for Wyeth this year. Drugs for treating depression, alleviating menopausal symptoms and preventing osteoporosis have been delayed at the FDA for reasons ranging from the need to conduct extra testing to requests for more data. Earlier this week, Wyeth said it halted testing on a drug for fibromyalgia, a disease characterized by fatigue and pain in muscles and joints. However, Wyeth has had some good news. In May, the FDA approved a drug for advanced kidney cancer and an oral contraceptive that eliminates a woman's monthly periods.

P.S. Ride Out Market Volatility with Cramer’s Recommendation"Use weakness in the market as an opportunity," says Jim. That’s why he’s bulking up his position in a stock that now accounts for nearly 4% of his personal portfolio. Find out which stock when you take a 14-day free trial to Jim’s Action Alerts PLUS.

http://www.thestreet.com/s/wyeth-whacked-on-drug-setbacks/newsanalysis/pharmaceuticals/10373715.html?puc=_tscrss