FDA Complete Response Letter Takes a Big Bite Out of Hope (SLXP, PGNX)

The U.S. Food & Drug Administration has sent Salix Pharmaceuticals Ltd. (NASDAQ: SLXP) and Progenics Pharmaceuticals Inc. (NASDAQ: PGNX) a Complete Response Letter (CRL) regarding the drug Relistor’s supplemental new drug application. Relistor is an injection for subcutaneous use for the treatment of opioid-induced constipation in adult patients who suffer from chronic, noncancer pain.

The CRL is now requesting additional clinical data. Salix and Progenics said that they intend to request an End-of-Review meeting with the Division of Gastroenterology and Inborn Errors Products to better understand the contents of the CRL.

Unfortunately the news is crushing. Progenix shares are down almost 50% at $5.45 in very active trading. The market cap prior to the drop was $365 million.

Salix was worth just over $3 billion and its shares are indicated down about 15% at $44.99 after a $53.19 close on Friday. So far we have seen Cantor Fitzgerald and Susquehanna downgrade Salix.

As is usual with Complete Response Letters, this means delays and higher costs of approval. It also is often is far worse than just that.

JON C. OGG