The US Food and Drug Administration (FDA) recently announced that it plans to withdraw the approval of Shire plc’s (SHPGY) ProAmatine. The drug is used to treat low blood pressure (orthostatic hypotension).
The drug was approved under the FDA’s accelerated approval program, under which companies are required to conduct post-approval studies of the drug in order to confirm its benefits.
The regulatory body noted that since the time of the approval of ProAmatine, neither Shire nor the drug’s generic makers conducted studies that proved the drug’s efficacy in patients suffering from orthostatic hypotension.
Shire, in response, issued a press release saying that it had conducted post-approval trials for ProAmatine as required by the FDA, but the regulatory body found those studies inconclusive asking Shire to carry out additional trials to demonstrate the drug’s benefits. Consequently, Shire decided to withdraw the drug from the market, effective September 2010, and notified the FDA in November last year and healthcare professionals earlier this year, of the same.
The regulatory body has asked the patients currently on ProAmatine or its generic not to stop their medication, and to consult their physicians for other treatment options.
We currently have a Neutral recommendation on Shire, which is supported by a Zacks #3 Rank (short-term Hold rating). Although ProAmatine is expected to go off the market in the near future, we do not expect it to have a substantial impact on Shire’s revenues, as the drug already faces immense generic competition from companies like Apotex Corp., Impax Laboratories Inc. (IPXL), Mylan Inc. (MYL), Novartis AG (NVS) and Upsher-Smith Laboratories.
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SHIRE PLC-ADR (SHPGY): Free Stock Analysis Report
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