Genelabs Surges on FDA Letter
Shares of a California biopharmaceutical company more than doubled in price Friday after the Food and Drug Administration issued a favorable letter on what could become the first new treatment in 40 years for the chronic and debilitating disease lupus.
The FDA said that Prestara, produced by Redwood City-based Genelabs Technologies Inc., is “approvable,” which means the drug can proceed to the next step on its way to possible final approval. In this case, the FDA said it wants an additional six-month clinical trial focusing on the drug’s effects on bone mineral density.
The news drove up Genelabs stock $1.43, or nearly 103%, to $2.82 on Nasdaq. Company President James A.D. Smith said it was too soon to predict when the trial would get underway.
Genelabs has been seeking FDA approval for Prestara (formerly known as Aslera or GL701) since the company turned in a new drug application in September 2000. But the company struggled to prove its effectiveness versus more common therapies and received a “not approvable” letter from the FDA last summer.
Since then, the company has filed new information that might have been crucial, according to experts on the disease. That information, according to the company and to disease experts, involved the fact that Prestara demonstrated an ability to build bone mineral density in lupus patients who were using prednisone, the traditional therapy. Prednisone, a corticosteroid, has the severe opposite effect on bone.
Another factor, said a source close to the FDA process, was that FDA officials who are more familiar with the disease now are in charge of the application.
Lupus is an autoimmune disease and in its most serious form, systemic lupus erythematosus, it attacks the tissues of the lungs, heart, kidneys, joints and nervous system.
But prednisone, according to the Lupus Foundation of America, does its own damage, eroding bone density so severely that young women often need joint replacement surgery.
Dr. Keith B. Elkon, head of the rheumatology division at the University of Washington, said Prestara, although not a breakthrough drug in effectiveness, would be “important to the arsenal against lupus” because it can help in counteracting prednisone’s effects.
The FDA’s favorable letter on Prestara figures to be good news for lupus sufferers, because the agency’s opposition has been discouraging to pharmaceutical companies, which are leery of devoting time and resources to drug development if they feel the bar for approval is too high, said Duane Peters of the Lupus Foundation.
Genelabs has licensed the drug exclusively to Watson Pharmaceuticals Inc. of Corona. But Wall Street analysts said Genelabs figures to get about 15% of the drug’s sales, if it is approved, instead of the usual 7% in such agreements because it has borne the brunt of development costs.
