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July 17, 2012
Vivus and Qsymia: The Oddest Drug Approval
Posted by Derek
More and Vivus and the peculiar timing of the approval of their new obesity therapy, now named Qsymia. OK, in addition to the article mentioned in the previous post, a video went up this evening at ABC news about the compound's availability, also before any word from the FDA. Not long afterwards, the agency released its official decision.
I heard about both of these leaks via Adam Feuerstein on Twitter, and he's rightly getting credit for getting the word out. All this makes it seem that (1) Vivus had heard earlier from the FDA that the drug was going to be approved, but was told to embargo the news, and (2) the company talked to at least one press outlet (USA Today) before the announcement, and told them to hold the story as well.
But I still have a whole list of questions: for starters, how often is it that companies get the advanced word like this from the FDA? I've never been in the position of being one of the first to hear these things, but I've certainly had the impression that this isn't the usual policy. (The potential for leaks, as we've seen today, is just too high). So why did Vivus get the tip-off this time? And how often does a company in this position go to the news media with quotes and photos ready, telling them to sit on the story until the FDA speaks up? Doesn't that increase the potential for leaks even more?
And what about Regulation FD? Isn't material information like this supposed to made available to all investors at the same time? I realize that there are press embargoes in situations like the ASCO meeting, but those clampdowns have been turning into more of a fiasco every year as well. It seems funny for the FDA to be getting into the information embargo business just as others are realizing how hard it is to make it work.
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1. BioBritSD on July 18, 2012 10:18 AM writes...
Essentially my same comment as before.
But, if the FDA is going to approve a drug, they are negotiating labeling with the company in the weeks leading up to the announcement. Those detailed printed sheets that are inserted with your drugs don't come out of nowhere. The company therefore knows that approval is coming, and the terms of that as it is reflected in the labels. If they haven't been approached to negotiate labeling, then they know "nothing" but it is clear that they aren't getting approved.
So, I don't think the FDA put the press embargo in place, VVUS did, then USA Today broke it. But I bet it is pretty common prior to these approval announcements.
To answer your question "how often is it that companies get the advanced word like this from the FDA" - every time they have some indication - albeit probably not the exact wording - of the decision weeks beforehand.
Permalink to Comment2. Matthew Herper on July 18, 2012 10:18 AM writes...
What Vivus probably did was to offer the news up under embargo on the condition that the stories would only be published if Qsymia was approved. They may not have had final word from the FDA, just certainty (based on labeling discussions) that approval was coming. The big question, I suppose, was whether FDA worked with the company on the timing of the release.
Permalink to Comment3. CanChem on July 18, 2012 11:10 AM writes...
Adam Feuerstein has a piece up today looking at pre-release info and news under embargo for those interested in reading his take on all of this.
Permalink to Comment4. RegGuy on July 18, 2012 1:03 PM writes...
As the guy who has received these letters in the past for companies, BioBrit and Matt are right - they knew it was coming.
Also, the FDA usually tells you the day of that the letter is in process. They won't say you're approved, but they tell you to expect the fax or email later on that day (the PDUFA date).
Permalink to Comment5. Philip on July 19, 2012 8:36 AM writes...
A few weeks ago trading was stopped before the Arena announcement. Seems like a simple problem to fix. FDA sends the fax or e-mail and trading stops until the company gets a chance to release their press release. About an hour after the press release trading starts.
Permalink to Comment6. BioBritSD on July 19, 2012 11:10 AM writes...
@Philip - you miss the point I think. The NASDAQ didn't have a chance to stop trading. They normally do it when the FDA put up on their website that they are about to announce - they can't really do it before. That didn't have a chance to happen, because before that USA Today accidentally published the story they had already written (under embargo).
There really isn't anything sinister or unusual happening here, USA Today merely screwed up - as had happened many times before I expect for many news organizations. VVUS may or may not share the blame - I don't know how usual it is for companies to use embargo's on drug approval announcements - but they use them routinely for all their other big press releases so I expect it is normal.
Permalink to Comment7. Philip on July 19, 2012 5:40 PM writes...
@6, My understanding is the the FDA sends a Fax or e-mail. The company then puts the final touches on their press release. This may take a few minutes or a couple of hours. The company tells the stock exchange to halt trading when it is ready to announce. Trading halts, the announcement is made and trading starts.
I just want the trading to stop sooner. If trading stops when the Fax or e-mail is sent, nobody has to worry about a premature release. If it happens and trading has not stopped investors would know it is not official. If it happened before the official PR statement but after trading was halted, the only people hurt are the company and the news organization.
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