Resources for Food and Drug Administration (FDA)
Collateral Damage From an FDA Warning
Ouch -- that's got to hurt. A fellow drugmaker's product got hit with an FDA warning that it could potentially cause cancer, and BioMimetic Therapeutics' (Nasdaq: BMTI) stock dropped more than 50% in response. Adding insult to injury, the stock of the drugmaker receiving the warning traded essentially flat that day.
Of course, that's only half the story. The drugmaker is Johnson & Johnson (NYSE: JNJ), which doesn't live and die by any one product. And BioMimetic's Gem 21S contains the same active ingredient (becaplermin) as J&J's Regranex, the drug hit with the Thursday warning.
After the news came out and its stock tanked, BioMimetic tried to reassure investors that, while they contain the same active ingredient, the two companies' products are far from the same. Regranex is used multiple times a day to treat leg and foot wounds in diabetics for as much as 140 days, while Gem 21S is used to regrow bone in patients with advanced gum disease. The data that worries the FDA suggests that patients who were prescribed Regranex three or more times had an increased risk of dying from cancer.
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