by H.S. Ayoub
BioHealth Investor.com
Shares of Novadel (NVD), a BHI Stock Pick, lost 13% in after hours trading on Tuesday following an announcement by Hana Biosciences (HNAB) that the launch of Zensana will be delayed. Hana’s stock price lost almost 20%.
Zensana is an oral spray developed by Novadel for the prevention of nausea and vomiting as a result of chemotherapy, radiation, and surgery. Manufacturing and sales rights were licensed to Hana.
The FDA had concerns relating to problems it found in the manufacturing of Zensana, especially with a certain precipitate found in the scale-up batches.
This may not be more than a time delay issue. Hana will have to take its time now to investigate what this "precipitate" is. The company did suggest that it will have to re-formulate the scale-up and manufacturing processes.
Novadel investors are now basically at the mercy of Hana Biosciences. Hana will not only have to fix the problem, but will also have to wait again for an FDA clearance. How much time will that take? Who knows! Hopefully not long.
For the time being Novadel’s other programs are on track, and are not related in any way to today’s announcement. So while a delay in the launch of Zensana is not positive, and will put pressure on Novadel’s stock price, investors should hold on to their shares, but continue to keep a close eye on Hana. Any more delays or problems, and maybe Novadel should think about a new partner.
Disclosure: Author holds a long position in Novadel stock.
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