Jazz Pharma: FDA Speaks Before Friday's Panel

FDA raises no issues with efficacy or safety of Jazz's fibromyalgia drug but is worried about potential for abuse and misuse.
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PALO ALTO, Calif. (

TheStreet

) --

Hey Adam, what do you think about Jazz Pharmaceuticals (JAZZ) - Get Report now after reading the U.S. Food and Drug Administration's review of the company's experimental fibromyalgia drug JZP-6?

The

FDA's review of Jazz's JZP-6, posted to the agency's web site this morning

ahead of Friday's advisory panel, reads fairly clean to me. No surprises. The FDA concludes that JZP-6 data from two phase III studies support the drug's safety and efficacy in the treatment of fibromyalgia.

Jazz shares were up $1.41, or 14%, to $11.46 in early morning trading. All good.

So, you think a positive vote Friday's from the advisory panel is a slam dunk?

Are you mad? Nothing involving the FDA and advisory panels is a slam dunk. I am confident that the panel vote will go Jazz's way -- just as I was when

we last chatted about the issues likely facing Jazz at the FDA panel

-- but we both know that FDA panel meetings can (and often do) go off-script in a hurry.

Okay, so what issues or concerns about JZP-6 are you expecting to foster the most debate?

The FDA is most worried about Jazz's ability to prevent the misuse and abuse of JZP-6 if the highly controlled and restricted drug receives an expanded approval for fibromyalgia.

In its review, the FDA estimates that the potential user population for JZP-6 balloons to 5 million people under a fibromyalgia approval compared to just 150,000 people for the drug's current approval (under the brand name Xyrem) as a treatment for narcolepsy.

Jazz has done a good job of implementing a restricted distribution, or risk management, plan for the use of Xyrem in narcolepsy, and the company is proposing a similar, although more expansive, plan for fibromylagia. FDA wants the members of Friday's advisory panel to go over Jazz's new risk management plan very carefully to make sure that it adequately addresses the risk of abuse and misuse of JZP-6.

Remind me again, why is FDA so worried about JZP-6?

JZP-6/Xyrem is a close chemical cousin of gamma-hydroxybutyric acid, or GHB, which has been used medically in the past as a general anesthetic but is also abused recreationally as an intoxicant and gained notoriety (not to mention the attention of law enforcement) as a date-rape drug. The U.S. Drug Enforcement Agency classifies GHB as a Schedule 1 drug, which means it's highly abuse-able, has no medical use and can't be prescribed legally.

With all that, however, Jazz did get FDA approval for Xyrem as a treatment for narcolepsy.

If FDA has no complaints with the way Jazz handles Xyrem for narcolepsy, why would the agency have issues with the drug also being used to treat fibromyalgia?

Again, the fibromyalgia indication will expose JZP-6 to far more patients, which could increase the incidence of abuse or misuse. While Xyrem is distributed through a single specialty pharmacy (you can't get the drug at your local CVS), the company wants to expand that to 15 specialty pharmacies for fibromyalgia. Jazz is also proposing to use the brand name Rekinla for fibromyalgia instead of Xyrem.

FDA, in its briefing documents, says it has concerns that what is essentially the same drug (albeit at different dosage strengths) will be sold under two different risk management plans as a treatment for two different diseases. Will this lead to medication errors and dosing errors? Will there be more opportunities for drug diversion and abuse? Will doctors and specialty pharmacies be confused by the different risk management plans, and will that over-burden the healthcare system?

Alright, I take back my slam dunk comment. You have me a little bit worried now. What's the worst-case scenario for Friday's panel?

Worst case? One or two experts on the panel go completely unhinged about Rekinla being the same as the notorious date-rape drug while conjuring up scary scenarios under which the expanded use of Rekinla in fibromyalgia leads to widespread abuse and an alarming increase in the rate of sexual assault. The evidence to back up these fears is scant, almost non-existent, but just the potential for these problems is enough to persuade the panel to vote against the drug.

Eek! Do you think this will happen?

No, I don't, but it's always prudent to prepare for the worst outcome.

You're more confident that cooler heads will prevail and JZP-6, or Rekinla, gets a positive vote?

I am. The concerns that FDA raises about the Rekinla risk management plan appear entirely negotiable and are not the sorts of roadblocks that keep a drug from being approved.

I do believe, however, that Rekinla's final approval will be delayed beyond the current FDA approval decision date of October 11 because of the complexities involved with nailing down a risk management plan.

If Friday's panel votes to recommend approval, the most likely outcome is a complete response letter from FDA on Oct. 11, with perhaps a three-month delay in Rekinla's final approval contingent on Jazz and the agency agreeing to terms of the risk management plan.

A short approval delay is not the end of the world, right?

Right.

Will you be following Friday's panel?

Of course! I'll be live-blogging the entire panel proceedings, beginning around 7:45 am. If you want an email reminder, please sign up.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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