Indevus Soars on FDA, Teva Deal News (Update)

The injection is already approved for use in Europe, where is it marketed by German drug firm Bayer.

In June, Indevus had about $60 million in the bank and was burning about $15 million a quarter. The prospect of a two-year delay for U.S. approval of the Nebido injection sent shares down 66% to a new 52-week low at that time.

"We are very pleased that we can provide to FDA additional data from existing clinical trials to satisfy FDA's desire to understand the incidence of these rare oil-based reactions, without the need to conduct new clinical trials prior to resubmission or approval," said CEO Glenn Cooper in a company statement.

Cooper also said that the FDA has agreed with the company's outline for a risk-mitigation plan, including a labeling description of the injection technique, allergic and oil based reactions and the commitment to conduct "a large, simple post-marketing study."

Nebido is an every-three-month injectable testosterone to treat male hypogonadism, the failure to produce adequate amounts of the male reproductive hormone.

Current treatments are administered via creams, gels or more frequent injections. Other companies competing in the testosterone replacement market are Repros Therapeutics (RPRX Quote) and Auxillium Pharmaceuticals (AUXL Quote).

On Friday, Indevus also announced a research and development deal with Teva Pharmaceutical (TEVA Quote) for its midstage product for the treatment of stuttering.

Under the terms of the agreement, Indevus will be reimbursed for expenses for a phase IIb study expected to begin enrollment in the first quarter of 2009. If the trial is successful, Indevus and Teva will split costs and profits in half in the U.S. thereafter. Outside of the U.S., Teva will be responsible for all future development and commercialization paying Indevus milestones and royalties on net sales.

Indevus said that it could receive up to $92.5 million in development milestones and reimbursement, including the expenses for the phase IIb study. Under certain circumstances, both companies can convert the 50/50 deal to a royalty structure, in which case Teva will be responsible for all development expenses, paying Indevus milestones and royalties.