An Amgen (AMGN) - Get Report drug to treat secondary hyperparathyroidism was rejected by U.S. regulators on Wednesday, but in an egregious abdication of corporate transparency, the biotech company offered no public explanation at all for why the drug's marketing application was denied.
Amgen delighted in touting the bright prospects of the drug known as Parsabiv to investors as it cleared several late-stage clinical trials. Now that the U.S. Food and Drug Administration has rejected Parsabiv, Amgen owes investors a lot more disclosure than the opaque statement issued Wednesday night:
Amgen is reviewing the Complete Response Letter, and we anticipate a post-action meeting with the FDA later this year to discuss the Complete Response.
[In FDA regulatory jargon, a Complete Response Letter is the document sent to drug makers when a marketing application is denied.]
An Amgen spokesperson did not respond to questions.
There is no legal or regulatory prohibition against drug makers sharing the full contents of FDA Complete Response Letters with investors. Companies rarely do so, however, citing the desire to keep potentially delicate information away from competitors.
Still, it's standard and widely accepted practice for drug companies to provide investors with a basic summary of Complete Response Letters. An FDA drug rejection is a material event for any publicly traded company and, as such, investors deserve to know what happened and why when FDA says no.
Parsabiv is not a make-or-break product for Amgen. If approved eventually, Parsabiv sales would likely come from patients already taking Sensipar, an older hyperparathyroidism drug from Amgen which brings in about $1 billion in annual revenue.
Big drug or not, Amgen's decision to offer no information at all about Parsabiv's rejection is a shameful shirking of its responsibility to be transparent with investors.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.