Stock Crash: Pozen Shares Plummet 61% After FDA Rejects Proposed Treatment For Migraines
Posted June 11, 2006 5:27 a.m. EDT
CHAPEL HILL, N.C. — 33Shares in pharmaceutical firm
plunged nearly 61 percent Friday on news that the Food and Drug Administration would not approve immediately a new migraine drug until further safety information is acquired.
Pozen (Nasdaq: POZN) shares fell to $8.59 to close at $5.52.
The crash in price cut Pozen's market cap to $161 million from $409 million based on its opening Friday price of $14.11.
Nearly 25 million shares changed hands. Normal daily trading was less than 500,000 shares.
The stock plunged after Pozen and GlaxoSmithKline, its partner in development of the drug, disclosed the receipt of the FDA news at 10:15 AM Friday.
The proposed drug is called Trexima. Media reports had cited analysts as saying Trexima could be a billion-dollar blockbuster drug.
GSK (NYSE: GSK) shares fell slightly to $54.75, a drop of 65 cents.
"The FDA has determined that Trexima is effective as an acute treatment for migraine headaches," Pozen said in a statement, referring to the FDA's so-called "approvable letter".
"The Agency has requested additional safety information on Trexima, which may require new studies. POZEN and GSK intend to request a meeting with the FDA as quickly as possible to discuss the approvable letter and determine the appropriate next steps to gain full approval."
Pozen and GSK had expected the drug to be approved and put on the market later this year.
Trexima is a combination of the GSK drug Imitrex, which is a pain reliever for acute migraines, and a combination of other products formulated with Pozen-developed technology. Trexima also contains naproxen sodium, a non-steroidal anti-inflammatory drug used in over-the-counter drugs such as Aleve.
Pozen received a $20 million milestone payment last fall from GSK following the submission of the new drug application for Trexima to the FDA.
GSK made as $15 million milestone payment to Pozen in May of 2004 based on reaching Phase III clinical trial milestones. At that time, the companies said they hoped to file the new drug application in the second half of 2005.
More than 20 million Americans and more than 300 million people worldwide suffer from migraine headaches.
Pozen stock has traded as high as $18.62 over the last year, the price rising after Pozen and GSK filed the new drug application. Its previous low had been $7.25.
Pozen dropped development of another proposed migraine treatment last year.