(Adds details, share movement, analyst comments)
By Anuradha Ramanathan
BANGALORE, Sept 26 (Reuters) - Shares of Indevus Pharmaceuticals IDEV.O more than doubled after the company reached a deal with U.S. health regulators to use its existing data for an early re-application seeking marketing approval for its testosterone replacement drug.
The agreement with the U.S. Food and Drug Administration removes the need for more studies and Indevus now plans to apply again for marketing approval in the first quarter of 2009, and launch the drug in the fourth quarter, the company said in a statement.
The company said the FDA also agreed with a number of its labeling plans.
The surge in shares is an “appropriate reaction” and the agreement wipes off any uncertainties investors had about the drug, Nebido, said Gary Nachman, an analyst at Leerink Swann.
“The valuation of the stock, right now, is still not giving full credit for Nebido, which it shouldn’t at this point, given the hiccups that we have had along the way,” Nachman said.
Leerink Swann LLC makes a market in the shares of Indevus.
Shares of the Lexington, Massachusetts-based company were up $1.94 at $3.67 in afternoon trade on Nasdaq. They rose as much as 120 percent and touched a high of $3.80 earlier in the session.
Analyst Nachman said he expects the company to achieve about $200 million in sales if it launched the product in a timely manner.
Nebido is expected to be the first long-acting testosterone preparation available in the U.S., Indevus said, and expects the introduction of the drug to have a significant positive impact on its business plan.
In June, Indevus received an “approvable letter” from the FDA saying the application for Nebido, a treatment of male hypogonadism, may be approved if the company adequately responded to certain clinical deficiencies.
At that time, Indevus said it would take about 18 months to re-submit the revised new drug application, indicating that the approval of the drug for hypogonadism -- an inability of the testicles to produce the hormone testosterone -- could be pushed back by two years.
The re-submission database includes experience from over 14,000 injections in more than 2,600 patients, gathered from existing clinical trials conducted in the United States and post-marketing studies conducted in Europe.
The FDA indicated that the number of patients and the number of injections of Nebido, a long-acting preparation of testosterone undecanoate, from existing European and U.S. studies provide an adequate size database, Indevus said.
Separately, Indevus said it signed a licencing agreement with Israel’s Teva Pharmaceuticals Industries Ltd TEVA.O (TEVA.TA) for the exclusive, worldwide rights to Pagoclone, a treatment for stuttering.
Under the agreement, Teva will reimburse the phase IIb study expenses incurred by Indevus, the company said.
After the successful completion of the study, the agreement provides Indevus to participate in a 50:50 basis with Teva in the United States, sharing development and marketing costs and splitting future profits in addition to milestone payments.
Indevus could receive a milestone and reimbursement payment of up to $92.5 million. If converted into a royalty structure, Indevus could also get up to $50.0 million in U.S. based sales threshold milestones.
For territories outside U.S., Teva will be responsible for future development and marketing of Pagoclone and Indevus will get milestones and royalties on net sales. (Editing by Gopakumar Warrier)