Impact of US FDA's approval delays on drug majors and biotech: Lehman

Over the past five years, pharmaceutical investors have becomeaccustomed to quicker New Drug Application review times from the US Food and Drug Administration, and this has been accompanied by higher approval rates, note analysts at Lehman Brothers. However, this tide may have changed, they say, pointing out that, according to IMS Health data, the FDA mean approval time for 2000 was 17 months, compared with only 11 months in 1998 and that only 27 approvals occurred in 2000, the lowest output since 1995.

The analysts say, that while it is not yet clear if these examples of delays are a result of a "headless" FDA, a policy shift, increasing conservatism by agency members or a combination of factors, but have set out to assess the impact on major pharmaceutical and biotechnology companies.

Within the biotechnology universe, they say Actelion and Inhale Therapeutics Systems stand out as the companies most exposed. Actelion filed Tracleer (bosentan) in November 2000 for pulmonary hypertension and has a follow-on edothelion receptor agonist which is in Phase III trials for broader indications. Inhale derives a large proportion of its value from Exubera (inhaled insulin), due to be filed with the FDA in December this year (Marketletter July 2), and will be commercialized by Pfizer and Aventis, the analysts note.