How Concerning Is Pfizer and Opko’s Latest FDA Rejection?

Jennifer E. Engen

The U.S. Food and Drug Administration (FDA) recently refused to approve Pfizer‘s (NYSE:PFE) and Opko Health‘s (NASDAQ:OPK) growth hormone therapy, somatrogon. In this Motley Fool Live video, recorded on Jan. 26, Motley Fool contributors Keith Speights and Brian Orelli discuss how concerning this rejection is for the two companies.

Keith Speights: We mentioned at the beginning of the segment that Pfizer had an FDA rejection. Of course, the company has had a lot of success in the COVID-19 arena, but that success hasn’t carried over to all of its other efforts.

So the U.S. FDA recently issued a complete response letter to Pfizer, that’s basically turning down — a rejection, related to approval growth hormone therapy, somatrogon, which was developed by Opko Health. How concerning is this latest FDA rejection for Pfizer and for Opko?

Brian Orelli: It’s a big deal for Opko. Shares were down almost 24 percent on Monday after the news was announced, and then they went down another 6.8 percent on Tuesday. Pfizer’s much larger, so the rejection isn’t that big of a deal. Pfizer’s shares were down 2.4 percent on Monday, and they recovered most of that loss on Tuesday.

Unfortunately, Pfizer didn’t give us any information on what the reason for the FDA issuing the complete response letter. It could be a marginal benefit of the drug over the standard of care hormone or maybe it’s a manufacturing issue or maybe it’s a safety issue. That seems probably unlikely.

Or maybe the FDA didn’t like the font of the application was submitted in. I’m joking, of course, but we just really don’t know, and this highlights the black box that investors find themselves in when companies get a complete response letter, because the FDA doesn’t say anything.

So you’re relying completely on the company giving information. In this case, Pfizer didn’t give us any information. Sometimes smaller companies will give you some information, but they may not be giving you the whole story on how bad it is. It’s really difficult for investors when companies get complete response letters.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.


https://www.fool.com/investing/2022/02/03/how-concerning-is-pfizer-and-opkos-latest-fda-reje/

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