FDA Letter Slams Vicuron Shares

The shares are hammered on disappointing news about a candidiasis candidate.
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Updated from 10:15 a.m. EDT

Shares of

Vicuron

(MICU)

fell sharply Monday after the company said the Food and Drug Administration denied approval of a drug as a first-line treatment for a dangerous fungal infection of the mouth.

However, the FDA held out hope for the experimental drug ? anidulafungin ? as a possible therapy for other serious fungal infections or as a treatment of serious fungal infections after other medications had failed.

The announcement pounded Vicuron's stock, which fell $8.67, or 39.6%, to $13.23. The stock fell as low as $12 for the King of Prussia, Pa. company, which was counting on the drug as its first product to market.

George Horner III, the company's chief executive and president, told investors Monday in a telephone conference call that he "did not expect" the FDA's ruling, adding that he was disappointed by the agency's action. He said his surprise was amplified by the fact that the company was "in constant contact" with the FDA.

This is the second setback for the drug, which Vicuron was seeking approval as a first-line therapy for esophageal candidiasis, a fungal mouth infection that most often appears in people with weakened immune systems, such as HIV/AIDS patients or cancer sufferers undergoing chemotherapy. The infection can cause pain and difficulty in swallowing and can progress into more serious problems.

Vicuron had been expecting a first half-2004 launch of the drug when it received a notice in January that the FDA was extending its review by 90 days to May 25. The agency wanted to see more data.

Vicuron announced on Monday that it received the latest bad news from the agency on Friday afternoon. The FDA sent Vicuron an "approvable" letter, meaning that its drug application could be accepted under certain circumstances. In this case, the FDA suggested that Vicuron could wait to complete existing tests or conduct additional tests to seek appropriate uses for the drug.

Vicuron is conducting a Phase 3 clinical trial ? the final step before a drug's application is submitted to the FDA ? on using anidulafungin to treat invasive candidiasis, a fungal infection that enters the bloodstream, and candidemia, a type of invasive candidiasis found in low-birth-weight babies, surgical patients and people with suppressed immune systems.

"We intend to meet with the FDA to discuss all of our options...as soon as possible," Horner said. He added that Vicuron would take "appropriate management action" to reduce costs, given the FDA's decision,

Horner said the company would present to investors in 30 days a detailed analysis on cost-cutting efforts and its strategy for securing anidulfungin's approval.

Horner added that the company's other lead experimental product ? an antibiotic, called dalbavancin, for deadly hospital-based infections ? is still in Phase 3 clinical trials. The company remains "on track" to seek FDA approval for the drug by year-end, Horner said.