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FDA Staff Critical of Treatment to Reduce Preterm Births


A briefing document doesn't bode well for a treatment from Watson Pharmaceuticals and Columbia Laboratories.

Strike one for Watson Pharmaceuticals (WPI) and Columbia Laboratories (CBRX) in their quest for a treatment that curbs the number of preterm births.

The companies failed to sway government folks reviewing Prochieve, a vaginal progesterone gel aimed at reducing the risk of preterm births. The highly negative sentiment from US reviewers doesn't bode well for the product's chance of getting an important endorsement from a panel of Food and Drug Administration advisers later this week.

"The information and data in this application do not support the efficacy of progesterone gel compared with placebo in reducing the risk of preterm births," FDA reviewers say in a document prepared for a Friday advisory panel.

The expert panel will make a recommendation to the FDA, which will weigh the advice as it decides whether to approve Prochieve for such use. Watson, which licensed the drug from Columbia, has said Prochieve will be an important treatment for women at risk, specifically those with short cervical length.

RBC Capital Markets analyst Shibani Malhotra predicts a negative panel vote and expects the FDA to require another study. The agency is expected to rule on the product by late February.

The just-released briefing documents for the meeting "were significantly more negative than we had expected," Malhotra said in a note. She rates Watson a hold.

For Watson, a rejection would be a setback but the drug isn't everything for the specialty drug company, which just launched a generic copy of Pfizer's (PFE) blockbuster cholesterol drug Lipitor in late November. For small-cap company Columbia, on the other hand, a rejection is huge.

Public since 1988, Columbia develops drugs until it can partner to pay for late-stage clinical trials and commercialization of its products. It's revenue is dependent on royalty and milestone payments. The company had $21.5 million in net income, or 20 cents a share, on $36.7 million in revenue through nine months last year.

Columbia shares lost more than half their value late Tuesday after the FDA documents were posted. They recovered a bit, up 19% to $1.30 in midday trading Wednesday. Watson declined about 7% Tuesday but rose almost 1% Wednesday to $58.34.

Twitter: @brettchase

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