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Biotech United Therapeutics ( UTHR ) said Thursday that the Food and Drug Administration had rejected its partner Medtronic ‘s ( MDT ) application for approval of a device to deliver the former’s lung-disease drug Remodulin, sending United Therapeutics’ stock down sharply. Remodulin, a treatment for pulmonary arterial hypertension, became a top seller for United Therapeutics in injectable form, but the company has been developing different delivery methods that broaden the patient base and also help extend the drug’s patent life. United Therapeutics had hoped that Medtronic’s implantable device could treat patients with the most severe forms of the disease, who can currently only use the intravenous form. United Therapeutics’ brief SEC filing didn’t say why the FDA had rejected the device, and Medtronic has said nothing about it, although the FDA’s response letter arrived over a week earlier. The filing did say that the letter had “noted various measures that Medtronic should take” to make the filing approvable, which the two companies were currently discussing. United Therapeutics also noted that it’s filed for a label extension on Remodulin to approve it for use through the device, which is due for a decision by October. United Therapeutics’ stock hit a 17-month low of 109.44 in early trading on the stock market today . By mid-morning it was down 8.5% near 111, while Medtronic stock was down more than 1%, near 73.50. A top-rated stock a year ago, United Therapeutics retains a stellar IBD EPS Rank of 98, but quarterly results that missed analyst estimates and increasing competition started pressuring the stock, even before the biotech sell-off started in August. This made the pump financially important, according to RBC Capital Markets analyst Michael Yee. “Investors view the ‘implantable pump’ as an important near-term program that could stop or slow erosion of Remodulin generic with a settlement with ( Novartis ( NVS ) unit) Sandoz set to allow a version starting June 2018,” Yee wrote in a research note. “If this pump is continuously delayed, then there’s less time to convert patients over to it and bring the approvability into question, and (it) increases risk of generic erosion of the core franchise.” Scalper1 News
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