(By Balachander) Progenics Pharmaceuticals Inc. (NASDAQ:PGNX) and Salix Pharmaceuticals Ltd. (NASDAQ:SLXP) retreated sharply after the U.S. health regulators sought additional clinical data following a review of opioid-induced constipation treatment Relistor.
Tarrytown, New York-based Progenics has licensed rights for Relistor to Salix.
The companies received a complete response letter (CRL) from the U.S. Food and Drug Administration (FDA) following its review of a Supplemental New Drug Application (sNDA) for Relistor injection for treating opioid-induced constipation in adult patients with chronic, non-cancer pain.
Relistor is already approved by the FDA to treat constipation in patients with advanced illnesses where laxative therapy has not been sufficient.
"There was nothing about oral Relistor in this CRL, but we would still not be at all surprised for Salix to no longer guide for a 3Q12 FDA filing," Brean Murray, Carret & Co. analyst Jonathan Aschoff wrote. "On a relatively bright note, it does not at all appear as if Salix will return Relistor to Progenics."
"As far as we can tell now, the required information could be as egregious as another Phase 3 or relatively minor," Aschoff said.
Aschoff "firmly believes that Salix will rapidly find its support today and that the weakness should be bought in advance of what we believe will be strong 2Q12 results."
On Monday, Progenics shares nearly lost half of its value to trade 47.61 percent lower at $5.65. Salix stock retreated 11.88 percent to trade at $46.87.