SAN FRANCISCO (AP) Federal regulators said Tuesday they want more information about the potential side effects of Xolair, a new asthma and allergy drug that three biotech companies had planned to sell next year.
The request means potential approval of Xolair will be delayed at least a year. Investors dumped the stock of the three companies involved in making and marketing Xolair: Genentech Inc., Novartis A.G. and tiny Tanox Inc.
Tanoxs selloff was so steep that Nasdaq officials halted trading in the company for four hours during the day. The stock closed down 44 percent to $14.20 a share.
Tanox developed the drug and sold marketing rights to the other two companies. Xolair was the only drug the 90-employee Houston-based company had in such advanced development.
Genentechs stock price dropped nearly 16 percent to close at $43.85. Novaris U.S.-traded stock lost nearly 4 percent to close at $33.13.
Genentech and Novartis, which have U.S. marketing rights to Xolair, said they will scale back the number of severe asthma and allergy sufferers they had targeted in hopes of gaining faster approval, Genentech spokeswoman Shelley Schneiderman said.
The two drug titans wanted to sell Xolair to children as young as 6. Now the companies will ask the FDA to approve the drug for sale to people 12 and older, Schneiderman said.
Xolair is the fourth consecutive drug the FDA has delayed or declined to approve in the last two months. President Bush has yet to appoint an FDA commissioner, prompting fears the agency will be even slower in acting on drug requests than usual.
Xolair, administered through injection, was supposed to be the first in a new class of drugs that target a chemical in the blood, called IgE, that is involved at the start of a string of events that leads to asthma.
San Francisco-based Genentech and Switzerland-based Novartis planned to sell the drug in the United States, while Novartis owns the European rights. Both companies were to pay Tanox royalties.
While the delay will hurt the bottom line of all three companies in the near term, the FDA is still likely to eventually approve Xolair, said Carol Werther, an analyst with Boston investment bank Adams, Harkness & Hill Inc.
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