Long, Strange Day for GeoPharma

Updated from 3:08 p.m. EST

Shares of GeoPharma (GORX) walked a tightrope of miscommunication Wednesday, rising as much as 150% after the company trumpeted marketing clearance for a device to treat painful mouth sores caused by some cancer treatments.

Shares of Largo, Fla.-based GeoPharma soared as much as 153% to $11.25 in early Wednesday trading after the company issued a press releasing stating that its Belcher Pharmaceuticals unit had received FDA approval to market Mucotrol to oncologists for the treatment of oral mucositis and stomatitis. GeoPharma estimated the commercial potential for Mucotrol would be in the range of $75 million to $300 million per year.

Early in the afternoon, the stock tumbled and was subsequently halted at $6.81 after FDA officials told media outlets including this Web site that they had no record of Mucotrol.

But the agency later backtracked, saying the treatment had been cleared for marketing on Nov. 24 -- not as a drug, but as a device. The product received so-called 510(k) marketing clearance because of its substantial similarity to a product already on the market. That product is GelClair, marketed by OSI Pharmaceuticals (OSIP).

Mucotrol is a wafer coated with soluble gums that dissolves in a patient's mouth and is designed to relieve the pain caused by oral mucositis, according to GeoPharma President Kotha Sekharam. Mucotrol is an improvement over GelClair because it's easier to use (GelClair must be dissolved in water), says Sekharam, but he acknowledges that there is no active drug ingredient in Mucotrol, which the company refers to as a "prescription product."

Wednesday's confusion, with the FDA first saying Mucotrol wasn't approved, then backtracking and saying it had received marketing clearance, was likely caused because the FDA officials were checking with reviewers in the agency's drug division, not its medical device division, says Sekharam.

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