* FDA advisers vote 10-5 against recommending approval
* Agency usually follows panel recommendations
* Shares drop 8 percent after hours
By Lisa Richwine
SILVER SPRING, Md., April 7 Forest Laboratories
Inc FRX.N suffered a setback on Wednesday as a U.S. advisory
panel voted against recommending approval of an experimental
drug to treat a common and deadly lung disorder.
The committee voted 10-5 that Forest had not provided
substantial evidence to support Food and Drug Administration
approval of Daxas for chronic obstructive pulmonary disease
Forest shares fell 8 percent in after-hours trading.
The company's shares had jumped 6.5 percent ahead of the
market close after the advisory panel voted that Daxas was safe
and effective in separate 9-6 votes.
In opposing approval, some panelists said the benefits of
Daxas were small and did not outweigh risks.
"The benefit of this drug, although it's there, it's
meager," said Dr. Richard Honsinger of Los Alamos Medical
Center Clinic in New Mexico.
"The drug does have side effects," he added.
The fate of Daxas, a once-a-day pill, is key to Forest as
the company tries to build its portfolio ahead of the 2012
patent expiration for its huge-selling antidepressant Lexapro.
Daxas was developed by Nycomed [NYCMD.UL], a privately held
Swiss drugmaker aiming for an initial public offering. Forest
holds U.S. rights to the drug. Analysts have estimated peak
annual sales could hit $500 million or more.
The FDA usually follows panel recommendations, and a
decision is due in mid-May. Analysts said before the meeting
they expected a delay as Forest recently modified the drug's
proposed use from broad treatment of COPD to reducing
exacerbations, or attacks that restrict breathing. The panel
voted on the broader use.
Forest may win approval for the narrower group of patients
but not before the end of the year, said analyst Ira Loss of
"There's a lot of places the FDA could go here in getting
the narrow indication," he said.
Collins Stewart analyst Louise Chen also said the panel
outcome "doesn't mean the drug's not going to get approved."
She noted that the votes were mixed and said any weakness
in Forest's share price will likely be short-lived.
"I think it will bounce back," Chen said.
COPD, or "smoker's lung," is a potentially fatal lung
disease that causes breathing trouble and chronic coughing. An
estimated 80 million people worldwide have moderate to severe
Forest said COPD patients needed new options as many still
have symptoms despite treatment with current drugs. The company
said studies in more than 7,000 patients showed Daxas reduced
FDA reviewers, however, said Daxas produced only a modest
improvement in lung function. They urged the panel to weigh
that against concerns about severe diarrhea, weight loss,
cancer, psychiatric problems and suicides among people who took
Daxas in studies. Three people killed themselves, and two
Forest said there was no evidence that Daxas caused the
suicides or raised the risk of cancer. The company said other
risks were manageable.
Lawrence Olanoff, Forest's president and chief operating
officer, said he was disappointed the panel did not recommend
approval but said the company would continue talking with the
FDA in light of the two positive votes.
"We believe there is still room for us to begin and go
forward with negotiations with the agency," Olanoff told
Daxas, known generically as roflumilast, works by
inhibiting an enzyme called PDE4 that is linked to
inflammation. Nausea, diarrhea and weight loss are known side
effects of the PDE4 inhibitors.
Forest shares rose 6.5 percent to close at $32.46 on the
New York Stock Exchange. The shares fell 8 percent after hours
(Reporting by Lisa Richwine and Deena Beasley; Editing by
Gary Hill, Bernard Orr)