Below is a list of the companies that made news in the healthcare sector on Friday, July 2, 2010.
Cepheid (NASDAQ:CPHD) after the market close today announced that the company is initiating a recall of all lots of Xpert® MRSA/SA BC (blood culture) product. The recall is a corrective action, which does not require return of product to the manufacturer. Customers may continue to use the product; however, when a MRSA negative/SA positive result is obtained, the result should be interpreted as “MRSA indeterminate/SA positive, antimicrobial susceptibility testing pending.” Further testing should be performed using a FDA-cleared, phenotypic antimicrobial susceptibility testing method on isolated colonies recovered from the blood culture bottle, as instructed in the Corrective Action Notice dated July 1, 2010. MRSA positive/SA positive results can still be reported as such. The new instructions will be incorporated in the product labeling. The Xpert MRSA/SA BC product produces false-negative MRSA results, which could potentially contribute to incorrect treatment of an MRSA infection.
Hi-Tech Pharmacal Co., Inc. (NASDAQ:HITK) after the bell announced that it received a warning letter from the FDA. The warning letter primarily dealt with the marketing of several products that FDA states require FDA approval and manufacturing practices related to those products. The Company will respond to the warning letter and intends to meet with FDA to determine how best to resolve these issues. Hi-Tech is suspending sales of these products until the issue is resolved. Sales of these products totaled approximately $5 million in fiscal year 2010. Other than the suspended products, Hi-Tech does not anticipate any interruption in supply of its products.
Hi-Tech is a specialty pharmaceutical company developing, manufacturing and marketing generic and branded prescription and OTC products for the general healthcare industry. The Company specializes in difficult to manufacture liquid and semi-solid dosage forms and produces a range of sterile ophthalmic, otic and inhalation products. The Company’s Health Care Products Division is a leading developer and marketer of branded prescription and OTC products for the diabetes marketplace. Hi-Tech’s ECR Pharmaceuticals division markets branded prescription products.
Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) today announced that Eisai Inc. will market lorcaserin for obesity and weight management in the United States following U.S. Food and Drug Administration (FDA) approval under the terms of a marketing and supply agreement between Arena Pharmaceuticals GmbH, a wholly owned subsidiary of Arena Pharmaceuticals, Inc., and Eisai. Lorcaserin, which Arena discovered and has developed for weight management, is intended for obese patients as well as overweight patients who have at least one weight-related co-morbid condition.
As part of the marketing and supply agreement, Arena has granted Eisai exclusive U.S. rights to commercialize lorcaserin. Arena will manufacture lorcaserin at its facility in Switzerland and sell finished product to Eisai for marketing and distribution in the United States.
“Through this agreement, we believe Eisai has an opportunity to bring a new option to market to address the significant and growing need for obesity treatments,” said Lonnel Coats, President and Chief Executive Officer of Eisai Inc. “Additionally, by building on our expertise and success in the primary care and specialty areas, with strong synergy in our gastrointestinal franchise, this arrangement for the marketing of lorcaserin will enable Eisai to establish a strong presence in the United States for the medical management of obesity.”
Under the terms of the agreement, Arena will receive an upfront payment of $50 million from Eisai and, upon regulatory approval and the delivery of product supply for launch, up to an additional $90 million in milestone payments. Arena will sell lorcaserin to Eisai for a purchase price starting at 31.5% of Eisai’s annual net product sales, and the purchase price will increase on a tiered basis to as high as 36.5% on the portion of annual net product sales exceeding $750 million. Arena is also eligible to receive $1.16 billion in one-time purchase price adjustment payments based on annual sales levels of lorcaserin and up to an additional $70 million in regulatory and development milestone payments.
“Execution of this commercial agreement is a major milestone in our plans for lorcaserin,” said Jack Lief, Arena’s President and Chief Executive Officer. “We believe in Eisai’s human health care mission to satisfy unmet medical needs and increase benefits to patients and their families. With Eisai, we have the right company to market lorcaserin in the United States, the right type of agreement to optimize lorcaserin’s medical and commercial potential and the shared recognition that it is the right time to enter into this agreement to prepare for launch following FDA approval.”
Shares of Arena surged nearly 16% or 49 cents, ending the day at $3.56.
Cell Therapeutics, Inc. (NASDAQ:CTIC) rose more than 12% today after the company announced that it has deposited $39.3 million in cash as trust funds with U.S. Bank National Association, as the trustee of the outstanding 4% convertible senior subordinated notes, which is an amount sufficient to pay and discharge the entire amount due on the Notes, including accrued and unpaid interest.
“We are pleased that with recent successful financings we were in a position to retire all of our Notes with a maturity in 2010,” said James A. Bianco, M.D., CEO of CTI. “This should eliminate shareholder concerns over our ability to repay the Notes with a maturity in 2010, and we will continue our focus on moving our products forward through the clinic and the regulatory approval process as expeditiously as possible.”
Compugen Ltd. (NASDAQ:CGEN) announced today that administration of CGEN-15001 in an animal model of multiple sclerosis (MS) has been shown to completely abolish spontaneous relapses. In addition, administration of this novel molecule prior to disease onset demonstrated a pronounced delay of disease onset and a significant decrease in disease symptoms. These results, together with complementary results from earlier studies, strongly support a significant potential therapeutic utility for CGEN-15001 in the treatment of multiple sclerosis and other autoimmune diseases, such as rheumatoid arthritis, systemic lupus erythematosus, inflammatory bowel disease, and type 1 diabetes.
Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC), a biopharmaceutical company developing oral therapies that target the various phases of cell cycle control for the treatment of cancer and other serious disorders, today announced that the U.S. Food and Drug Administration (FDA) has granted orphan drug designation to the company’s sapacitabine (CYC682) product candidate for the treatment of both acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS).
“Orphan drug designation for both AML and MDS significantly strengthens the value proposition represented by sapacitabine and enhances our opportunity to advance this promising product candidate to late stage clinical development and commercialization,” said Spiro Rombotis, President and Chief Executive Officer of Cyclacel.
DARA (NASDAQ:DARA) moved higher today after the company announced it has decided to,effective immediately, indefinitely suspend the public offering of $10 million of units comprised of shares of common stock and warrants that was announced on May 17th. Several important factors have influenced this decision. Principally, SurgiVision, Inc, of which DARA is the second largest shareholder after Boston Scientific Corporation (BSX), announced it had received clearance from the Food and Drug Administration (FDA) to market its ClearView System. On June 16, 2010 SurgiVision filed an Amendment to its S-1 Registration Statement containing additional information regarding its planned Initial Public Offering (IPO). In addition, high value licensing transactions in the pharmaceutical industry have accelerated with deals being consummated at earlier stages of development with significant upfront payments. The Board of Directors, management, and company advisors have concluded that given these positive developments and uncertain and volatile market conditions, raising capital at this time would pose unwarranted dilution to our shareholders.
Endo Pharmaceuticals (NASDAQ:ENDP) has submitted a complete response to the U.S. Food and Drug Administration (FDA) following the company’s receipt of a Complete Response letter in October 2009 related to the New Drug Application (NDA) submission for FORTESTA™ (testosterone) 2% gel. The company’s Class 2 resubmission is the next step in its intention to offer FORTESTA as a treatment option in the United States for men diagnosed with low testosterone (Low T), also known as hypogonadism. The FDA’s review period for Class 2 resubmissions typically is six months.
“We are optimistic that our expeditious and careful response to the FDA’s requests will lead to the agency’s approval of FORTESTA,” said Julie McHugh, chief operating officer, Endo Pharmaceuticals. “We are committed to making this testosterone gel formula available as soon as possible and will continue to work closely with the FDA toward our goal of making this product available for the treatment of low testosterone in men.”