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Pharmaceutical industry

Noven Pharmaceuticals Faces FDA Setback for Generic Fentanyl Patch

Strategic Insights

— 1 min read

Noven Pharmaceuticals, Inc., a US-based biopharmaceutical company, announced on September 28, 2005, that the US Food and Drug Administration (FDA) has advised the company that the FDA does not expect to approve Noven's Abbreviated New Drug Application (ANDA) for a generic version of Duragesic(R) (fentanyl transdermal system). The FDA's determination was based on potential safety concerns related to the higher drug content in the Noven generic product versus the Duragesic(R) product. This news has significant implications for Noven's financial performance, as the company has approximately $13.9 million in fentanyl-related inventories on its balance sheet.

Key Takeaways:

  • Noven Pharmaceuticals' Abbreviated New Drug Application (ANDA) for a generic version of Duragesic(R) (fentanyl transdermal system) faces FDA approval issues due to potential safety concerns related to the higher drug content.
  • The FDA's determination was made known to Noven at a meeting on September 27, 2005, where Endo Pharmaceuticals Inc., the US licensee of Noven's fentanyl patch, was also present.
  • Noven disagree with the FDA's conclusions and will be evaluating available avenues to pursue approval of the generic fentanyl patch.
  • The company expects to record a charge to income from operations of up to approximately $9.0 million for the quarter ending September 30, 2005, associated with its portion of the fentanyl inventory.
  • Noven is evaluating the circumstances under which it may recognize the $5.8 million in previously deferred license revenue relating to the balance of the non-refundable upfront payment made by Endo upon signing the fentanyl patch license agreement.
  • Endo may exercise its contractual right to terminate the license agreement, and Noven may be unable to recover from Endo their agreed-upon portion of the production costs of the existing inventories of the fentanyl patch.

Statistics:

  • Noven Pharmaceuticals' fentanyl-related inventories: approximately $13.9 million
  • Potential charge to income from operations for the quarter ending September 30, 2005: up to $9.0 million
  • Deferred license revenue: $5.8 million
  • Date of FDA meeting: September 27, 2005
  • Date of news release: September 28, 2005

Sources:

  • "Form 8-K" by Noven Pharmaceuticals, Inc. (September 28, 2005)
  • "Press Release" by Noven Pharmaceuticals, Inc. (September 28, 2005)
  • "Comtex SmarTrend(SM) Alert" by Comtex News Network, Inc. (September 24, 2005)

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