FDA: Behind the Numbers

BioMedTracker, which monitors drug development for investors, ran some numbers for me. As of August 13th, how does the number of FDA-approved drugs and "approvable" drugs compare to the same period a year ago? According to the company, drug approvals are down 16% and approvable letters are up 55%. An approvable letter is what the FDA issues when it believes it might someday okay a drug, but only if a company provides additional -- often publicly unspecified -- data. So, for investors, "approvable" is a euphemism for delay.

I pitched this story to CNBC editors and asked BioMed to crunch the numbers after the FDA issued its latest approvable letter for GlaxoSmithKline and Pozen for their migraine drug -- the soon-to-be-renamed Trexima. The agency said it detected potential carcinogenicity in the megadosed ovarian cells of Chinese hamsters. It struck me as emblematic of the safety-conscious -- some say "ultra conservative" -- FDA. And since then, the agency has rejected two more drugs including another one from Glaxo -- a decision which goes against a positive recommendation for approval by the agency's own Advisory Committee.

Some analysts say the FDA pendulum has swung in the other direction in the wake of Vioxx and Avandia. One, in particular, Michael Shulman, who writes a newsletter called "ChangeWave Biotech Investor", says the FDA lacks leadership, money and manpower. Shulman and Lazard Capital Markets Biotech Analyst, Joel Sendek, say it is making biotech investors more risk averse. They're less willing to place bets on late-stage developmental drugs when the FDA is becoming so unpredictable. And it shows in the performance of the Nasdaq Biotech Index since around the time Dr. Andrew von Eschenbach took over the FDA. An agency spokesperson says the FDA makes every decision based solely on the scientific evidence and data.