Forest Laboratories (FRX) is facing another delay where the approval of one of its pipeline candidates is concerned. The company and its partner, Ironwood Pharmaceuticals, Inc. (IRWD) recently announced that the FDA has extended the review period for their new drug application for linaclotide.
Forest Labs and Ironwood are looking to get linaclotide approved for the treatment of irritable bowel syndrome with constipation (IBS-C) and chronic constipation (:CC). The FDA has extended the review period by three months which means a decision should be out by September 2012. The FDA was previously scheduled to respond in June 2012.
Why the Delay?
The FDA had recently asked Forest Labs and Ironwood to provide an additional analysis of existing data. With the analysis being presented within three months of the FDA action date, the agency extended the review period by three months in accordance with the rules. The companies mentioned that they were not asked to submit new data.
Second Delay for Forest Labs
This is the second time this year that Forest Labs is facing a delay in the approval of its pipeline candidates. A few weeks back, Forest Labs had announced a three-month extension of the FDA action date for aclidinium bromide.
Forest Labs and partner Almirall are looking to get aclidinium bromide approved for the maintenance treatment of chronic obstructive pulmonary disease (:COPD). With the FDA pushing out the action date by three months, a response regarding the approvability of aclidinium bromide should be out by July. The agency has not asked for additional data.
Neutral on Forest Labs
We currently have a Neutral recommendation on Forest Labs, which carries a Zacks #3 Rank (short-term Hold rating).
Forest Labs needs to build its portfolio as the company is facing a major patent cliff now that its key revenue generator, Lexapro, is facing generic competition. While Teva (TEVA) launched its generic version of Lexapro recently, Mylan (MYL) is marketing an authorized generic version of the product.
Moreover, Forest Labs’ Namenda will face generic competition in early 2015 putting another $1+ billion at risk. That puts a lot of pressure on the pipeline to come through.
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