Opko Health (NYSE:OPK) is having a rough day in the market today, and for a good reason. The company received a less-than-desirable response from the United States Food and Drug Administration with regard to a New Drug Application that it recently submitted. Today, we'll talk about what we saw in the response from the FDA, how investors reacted to the news, and what we can expect to see from OPK moving forward. So, let's get right to it.
OPK Receives A Complete Response Letter From The FDA
As mentioned above, OPK is having a relatively rough day in the market today as the result of a complete response letter it received from the FDA. The response was in regard to a New Drug Application the company submitted for RAYALDEE, also known as calcifediol, as a treatment for secondary hyperparathyroidism in patients with stage 3 or 4 chronic kidney disease and vitamin D insufficiency. In their response to Opko Health, the FDA explained that it saw issues with regard to RAYALDEE. According to the FDA, the third party manufacturer did not cite any safety, efficacy or labeling issues with RAYALDEE. The issues found with the NDA had to do with a third-party manufacturer, who has committed to respond promptly to the FDA's observations in an attempt to ensure an early resolution to the issue. In the Complete Response Letter, the FDA has re-confirmed the acceptance of the proprietary name... RAYALDEE. On top of this, the FDA has reached an agreement with OPK with regard to an approvable package insert and all container labeling. In a statement, Phillip Frost, M.D., Chairman and CEO of OPK had the following to say with regard to the letter:
Opko is committed to bringing RAYALDEE to patients who will benefit from its intended use and will work closely with the FDA and our third-party manufacturer to ensure that the inspection observations are promptly and fully addressed... We will continue to build our commercial sales organization in preparation for the earliest possible RAYALDEE launch.
How The Market Reacted To The News
The reality is that the news moves the market, there's absolutely no denying that. Unfortunately for OPK, even though the FDA's issues were with regard to the third-party manufacturer, the bottom line is that RAYALDEE will not be able to move forward as fast as investors hoped. As we know, bad news tends to cause declines in the market, and that's exactly what we're seeing today. Currently (10:50), OPK is trading at $10.27 per share after a loss of $0.80 per share or 7.23% thus far today.
What We Can Expect To See Moving Forward
While today isn't the best of days for OPK, nor its investors, I'm expecting to see overwhelmingly positive news from the stock in the long run. The reality is that the problems that the FDA had with the NDA had to do with the manufacturer, not the treatment. In fact, the FDA has approved inserts and labeling, which is an incredibly important part of this NDA. As a result, I'm expecting for the manufacturer to move quickly here and get things back on schedule. The bottom line here is that RAYALDEE is a much needed treatment, and OPK has done incredible things with it. As a result, I'm expecting for approval to come down the line relatively soon leading to strong gains in the long run. Today's declines will likely prove to be nothing more than a blip on the screen.