The FDA's Killing Bug Killers

It's not good enough for a company just to have clinical trial data showing that its drug works; the Food and Drug Administration has to actually believe that the data is real.

Unfortunately for Johnson & Johnson (NYSE: JNJ) and Swiss drugmaker Basilea Pharmaceutica, the agency appears a little reluctant to take some of the data for the drugmakers' antibiotic ceftobiprole at face value. The FDA has asked the companies to "conduct additional audit work of clinical investigator sites and to address specific questions related to site monitoring" before resubmitting their marketing application.

Site monitoring is a big deal. Independent doctors are usually on the front lines of clinical trials, and it’s the company's responsibility to make sure the doctors are following the procedural setup before the trial begins. Redoing a trial because of a screw-up could be a very costly process.

Fortunately for Johnson & Johnson, there's some precedence for this. Theravance (Nasdaq: THRX) ran into the same issue about problems with monitoring a clinical site for a trial testing its antibiotic telavancin, but an FDA advisory committee eventually gave it a thumbs-up, so Johnson & Johnson's delay might not be the end of the world.

Lately, the FDA seems to be especially harsh on antibiotic drugs, and on Johnson & Johnson in particular. The agency turned down marketing applications for Johnson & Johnson's Doribax -- and an earlier ceftobiprole application -- as well as Wyeth's (NYSE: WYE) Tygacil earlier this year. An advisory panel wasn't so hot on Targanta Therapeutics' oritavancin last week, either, causing shares in that company to tank.

Whether this is a permanent change in standards that might reduce future competition for current antibiotic makers like Cubist Pharmaceuticals (Nasdaq: CBST) and ViroPharma (Nasdaq: VPHM) or just an unrelated rash of rejections is a bit of a mystery. Investors should be able to get a better handle on the situation when the agency makes a final decision on telavancin. They should also keep an eye on how easily Johnson & Johnson can bounce back from the latest rejections.

Copyright © 2008 Universal Press Syndicate.