SOURCE: The Bedford Report

The Bedford Report

April 06, 2011 08:16 ET

Blockbuster or Bust -- Speculative Drug Makers Face Greater FDA Scrutiny

The Bedford Report Provides Analyst Research on AVI BioPharma & Somaxon

NEW YORK, NY--(Marketwire - April 6, 2011) - There is plenty of optimism surrounding the healthcare sector as firmer pricing and new products have improved sales and earnings trends. Meanwhile, younger, more speculative firms continue to garner significant attention with potential blockbuster products working their way through the regulatory process. The Bedford Report examines the outlook for companies in the Healthcare Sector and provides research reports on AVI BioPharma, Inc. (NASDAQ: AVII) and Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX). Access to the full company reports can be found at:

A recent study released by BIO and BioMed Tracker claims that the success rate in bringing new medicines to market in the past six years is only about half of what it had been previously. The study claims, however, that biotech drugs are twice more likely to gain approval than more traditional chemical drugs.

The study finds that drugs moving from early stage Phase I clinical trials to FDA approval is roughly ten percent, down from around 20 percent in reports involving earlier years.The report adds that approval applications were filed for 55 percent of the drugs that made it to Phase III testing, and 80 percent of those gained eventual approval -- though only half were approved on initial review.

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The study also finds that that drugs used to treat cancer are the most difficult to gain approval, with a small 4.7 percent success rate. AVI BioPharma engages in the discovery and development of therapeutic products based on antisense and cancer immunotherapy technology. Last week shares of the company took a sizeable hit after the firm said it plans to offer 20 million common shares at a price of $1.50 each, a transaction that should gross $30 million.

Earlier this year Somaxon received a new patent on its insomnia drug Silenor, extending its exclusivity on the drug. The patents protecting the drug start to expire between March 2013 and February 2020. Last month the company reported a net loss of $16 million, or 42 cents per share, in the three months ended Dec. 31 compared with a loss of $1.9 million, or 8 cents per share, a year ago.

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