Schering-Plough Corp (nyse: SGP – news – people ) said Friday U.S. regulators had rejected Bridion, its drug to reverse the effects of anesthesia that had been heralded as a breakthrough product by analysts and was unanimously recommended by a federal advisory panel.
Shares of Schering-Plough fell 8.5 percent in early trading.
The U.S. Food and Drug Administration issued a "not-approvable" letter for the injectable medicine, also known as sugammadex. The agency cited concerns primarily related to "hypersensitivity/allergic reactions" to the product but raised no concerns about its effectiveness, the company said.
Schering-Plough did not describe the allergic reactions. In other drugs used to reverse anesthesia, they can range from decreases in blood pressure to increases in heart rate.
It was considered one of the most important products from Schering-Plough's $14.5 billion purchase last November of Organon Biosciences. Some analysts estimated it could generate annual sales of up to $1 billion if approved in the United States.
"We are surprised and disappointed with this action, especially given that sugammadex received a unanimous recommendation for approval by the FDA Advisory Committee on Anesthetics and Life Support in March of this year," Thomas Koestler, Schering-Plough's research chief, said in a statement.
The company said it will continue to press for U.S. approval of the drug and is attempting to address safety issues with the FDA.
Bridion was approved by the European Commission on Tuesday, following a favorable recommendation last month by its own advisory panel.
"I am profoundly disappointed because I thought this drug would dramatically improve patient care and safety," said Dr. Ronald Miller, chairman of anesthesia at the University of California, San Francisco, who is a consultant for Schering-Plough.
"As an anesthesiologist for over 30 years, I thought the allergic reactions, if due to sugammadex, were very mild and not as serious as drugs we currently use, including neostigmine and succinylcholine," Miller said.
Deutsche Bank (nyse: DB – news – people ) analyst Barbara Ryan called the Bridion rejection "a very big surprise." She said the FDA appears to have become overly timid following harsh media and congressional criticism of its approval of other drugs later deemed dangerous, including Merck (nyse: MRK – news – people ) & Co's withdrawn Vioxx arthritis drug.
"It looks like the FDA is in a bunker-down mode, with Congress all over them," Ryan said. "They're taking an extraordinarily cautious approach."
Bridion's ability to quickly reduce residual paralysis would make recovery rooms safer — by more quickly freeing patients from breathing tubes and their inherent potential of causing harm from undetected loss of oxygen, Miller said.
"And because sugammadex can completely reverse a profound paralysis, it would have allowed more ideal surgical procedures," Miller said.
Schering-Plough has been counting on Bridion and other products from the Organon deal to help ensure competitive future earnings growth. The earnings outlook for Schering-Plough has worsened this year, following negative findings for its Vytorin cholesterol fighter in two clinical trials that have hurt sales of the blockbuster product, which is sold in partnership with Merck.
Bridion was approved in Europe for reversal of neuromuscular block, or temporary paralysis, induced by the widely used muscle relaxants rocuronium and vecuronium.
It was shown in trials to reverse effects of neuromuscular blockade within minutes — nine to 12 times faster than the standard reversal agent, neostigmine.
Neuromuscular blockade is used by anesthesiologists to cause paralysis during surgical procedures, particularly of the abdomen, chest and brain. But patients require breathing tubes until the drugs wear off or are reversed.
Edward Jones analyst Linda Bannister said it is unclear whether the FDA will require a special safety trial for Bridion, and how long it would take.
In the meantime, despite the rejection of the product, she said Schering-Plough is still poised to have average annual earnings growth of 10 percent over the next five years, assuming that its other important experimental drugs are approved.
Unlike rival drugmakers, she said Schering-Plough is not facing the threat of generic competition in coming years for its big products.
Company shares fell to $19.25, from a closing price $21.08 on Thursday on the New York Stock Exchange. (Editing by Steve Orlofsky)
Reviewed by Ramaz Mitaishvili, MD
