UPDATE 2-Cadence says FDA refuses to OK pain drug; shares fall

Thu Feb 11, 2010 11:36am EST

* Says FDA indicated deficiencies in manufacturing facility

* Says FDA did not raise any safety, efficacy issues

* Shares fall as much as 8 pct (Adds comments from conference call, analyst comments, updates share movement)

By Anand Basu

BANGALORE, Feb 11 (Reuters) - Drug developer Cadence Pharmaceuticals Inc CADX.O said U.S. health regulators declined to approve its experimental intravenous painkiller, citing deficiencies in its third-party manufacturing facility, sending its shares down as much as 8 percent.

Cadence Chief Executive Theodore Schroeder, who on a conference call identified the third-party manufacturer as Baxter (BAX.N), said, "This was part of a routine facility inspection and not an inspection for cause."

In July 2007, Cadence entered into a development and supply agreement with Baxter Healthcare Corp for the drug Ofirmev.

"They (Baxter) do manufacture other products in this plant ... it is their main plant," Schroeder said.

The U.S. Food and Drug Administration did not cite any safety or efficacy issues for the drug, nor did it request any additional studies to be conducted prior to approval, the company said.

Canaccord Adams analyst Adam Cutler, who termed the manufacturing issues as minor, said more importantly there were no safety or efficacy issues.

Cutler expects the drug to get an approval later this year.

"People can view the approval most likely to be a 'when' issue not an 'if' issue," said the analyst, who has a "buy" rating on Cadence' shares.

Cadence said its third-party manufacturer intends to respond promptly to the observations. The company plans to request a meeting with the FDA to ensure that the deficiencies have been adequately addressed.

In November, the FDA extended the review date for the drug by three months, after the company submitted additional data. [ID:nBNG93849]

Shares of the company were down 4 percent at $9.87 Thursday morning on Nasdaq. They earlier touched a low of $9.50. (Reporting by Anand Basu in Bangalore; Editing by Ratul Ray Chaudhuri)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.