Pozen stock plunges on FDA decision

Pozen stock plummets 46 percent; partner Glaxo unfazed; FDA wants more info on migraine painkiller Trexima.

By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Pozen's stock price plunged 46 percent in Thursday trading, after the drugmaker and its partner GlaxoSmithKline got sent back to the drawing board by the FDA.

The agency demanded more data before it would approve Trexima, an experimental painkiller for migraines, said Pozen Inc. and GlaxoSmithKline.

The announcement came as a shock to investors. In Wednesday trading ahead of the announcement, Pozen's (down $7.71 to $9.74, Charts) stock jumped 8 percent as investors bet on FDA approval. The British drugmaker Glaxo (up $0.38 to $51.99, Charts), which has more than 500 times the market cap of its Milwaukee-based partner, did not experience a significant move in stock.

The Food and Drug Administration sent the companies their second approvable letter for the combination drug Trexima, meaning that the drug might someday merit approval, but not before Pozen and Glaxo provide additional information. This could require additional studies, which can be expensive and time-consuming, further delaying Trexima's potential market entry.

Trexima is a combination of an NSAID, a popular form of generic over-the-counter painkiller, and GlaxoSmithKline's Imitrex, a migraine painkiller. Imitrex is estimated to reach $800 million in 2007 sales, according to Ken Trbovich, analyst for RBC Capital Markets.

On Wednesday, prior to the companies' announcement of the FDA letter, Trbovich said Trexima had billion-dollar blockbuster potential, but he also said that rejection of the drug could spur a stock plunge of up to 50 percent.

The FDA had previously said the Trexima is effective as a migraine painkiller. But the agency wants more information about the combo's genotoxicity, or its potential to damage cellular DNA, which can result in mutations or cancer.

Trbovich does not own Pozen stock, but RBC makes a market in the company. Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.