MedImmune shares drop on FDA news

December 03, 1993|By Dow Jones News Service

NEW YORK -- Shares of Gaithersburg-based MedImmune Inc. plunged more than 30 percent yesterday in frenzied trading after a Food and Drug Administration advisory panel concluded that the company needed to do further clinical trials on its respiratory virus drug Respivir.

The stock price tumbled $7, to close at $16. With more than 4 million shares traded, it was the most active issue on the Nasdaq.

The FDA is certain to follow the committee's recommendation, which is sure to cause a substantial delay in the product's launch. The additional tests and FDA applications could keep Respivir off the market for another three years, analysts said.

Respivir is being developed to treat respiratory syncytial virus, or RSV, a condition that can cause bronchial infection and pneumonia in infants and young children.

MedImmune's near-term success hinged on approval of the drug, which is far and away the company's most promising product.

The panel's decision came as a big surprise to the company's backers, who were confident that the clinical data supported the drug's efficacy. Their faith was bolstered last month when the New England Journal of Medicine published the data from the 249-patient trial.

Attendees at yesterday's meeting characterized the tone of the discussion as decidedly negative. The panel's experts were particularly critical of the study's design.

"It's unfortunate because if the study were well controlled and there were no biases, it [Respivir] could have been very helpful for pediatricians," said John Wong, a biotechnology analyst at Van Casper & Co.

One of the principal concerns was the so-called "Denver effect." Data from a participating center in Denver were stronger than other sites, leading to speculation that the study wasn't effectively randomized.

The deaths of six patients involved in the clinical trials also plagued MedImmune during the FDA panel review. Although no direct link was established between the fatalities and Respivir, the possibility of a connection made committee members uneasy about clearing the drug.

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