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news.The FDA has issued a non-approvable letter for Velac Gel, an investigational new drug formulation for treating acne, as a result of a positive carcinogenicity signal that was detected in a TgAC mouse dermal carcinogenicity study.
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The negative out come has sent shares in skin treatment developer Connetics down by 26% and forced the company to cut 2005 financial forecasts. The failure of Velac (a combination of 1% clindamycin and 0.025% tretinoin) follows the disappointing negative outcome last year for the company’s anti-fungal Extina, which also failed to gain FDA approval.
“We are disappointed in the FDA’s decision. As discussed during our first quarter earnings call on April 26, we were particularly disappointed that FDA did not notify us of this as a potential issue until two months prior to the PDUFA date,” said Thomas Wiggans, CEO of Connetics.
“We remain committed to bringing Velac to market, and will be working with FDA representatives to determine what is required to do so. Despite this setback, Connetics will continue to expand its leading position in the dermatology field with four brands on the market and a robust and diverse pipeline.”
As a result of the setback, Connetics now projects 2005 total revenues to be $182 million to $188 million, down from previous guidance of $195 million to $206 million. Combined SG&A and R&D expenses for 2005 are projected to be between $121.5 million and $125.0 million. Diluted EPS for 2005 is projected to be in the range of $0.66 to $0.70, versus previous guidance of $0.88 to $0.92.