Jazz Pharmaceuticals falls after FDA denies petition


Jazz Pharmaceuticals (JAZZ) is retreating after the FDA denied its Citizens Petition regarding criteria for approval of generic versions of its Xyrem drug, a treatment for muscle weakness and daytime sleepiness in narcolepsy patients. Jazz had asked the FDA to specify whether in vitro or in vivo bioequivalence studies, or both, will be required before generic versions of Xyrem can be approved. Jazz requested that the FDA not accept any generic versions for review before making a decision on this issue. The company also petitioned the agency to require in vivo bioequivalence studies for any generic version whose components or manufacturing process differs from those of Xyrem. In a note to investors earlier today, Jefferies analyst Corey Davis wrote that the FDA's denial of Jazz's petition will facilitate the approval of a generic version of Xyrem created by Roxane Laboratories. However, the denial doesn't mean that Roxane's drug has been or will be approved soon, the analyst added. Jazz has a second Citizens Petition that addresses safety issues raised by Roxane's drug. This petition could cause Roxane's drug launch to be postponed for another year, although Davis doesn't think this is likely to occur. Moreover, the analyst believes that Roxane will face a large number of hurdles to selling its drug even if it's approved by the FDA, including patent litigation, safety issues, and problems persuading doctors to prescribe the drug. The analyst maintained a $74 price target and Buy rating on Jazz shares, which fell $1.01, or 1.91%, to $51.98 in early trading.

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