The US Food and Drug Administration (FDA) recently issued a
complete response letter (CRL) for
) insomnia candidate, suvorexant.
According to the agency, a 10 mg dosage should be the starting
dose of suvorexant, which has shown efficacy at doses of 10 mg -
40 mg in elderly as well as non-elderly adults. The FDA said that
the 15 mg and 20 mg doses should be used only in those patients
who need a higher dose.
The FDA also noted in the CRL that patients already taking
concomitant moderate CYP3A4 inhibitors should use a 5 mg dose of
Merck said that the FDA also determined that the safety data
on the 30 mg and 40 mg dosages of suvorexant were not sufficient
to support approval.
Based on a review of the CRL, Merck said that it does not
expect the agency to require additional studies on the 10 mg
dosage. However, the company believes it will have to conduct
manufacturing studies for this dosage. As far as the 5 mg dosage
is concerned, Merck will discuss with the FDA the need to conduct
Approval would have made suvorexant the first orexin receptor
antagonist to reach the market. However, we note that the
insomnia market is highly competitive and genericized especially
given the presence of generic versions of
Merck currently carries a Zacks Rank #4 (Sell). With Singulair
losing exclusivity in the US as well as the EU, we expect the
top- and bottom-line to remain under pressure. The decline in
Januvia sales in the first quarter of 2013 is also a matter of
concern. Other headwinds remain in the form of unfavorable
currency movement and pipeline setbacks. We believe the company
will look towards cost-cutting initiatives and share buybacks to
drive the bottom-line.
) looks well-positioned with a Zacks Rank #2 (Buy). Another
company that looks well-positioned is
) - the company carries a Zacks Rank #1 (Strong Buy).
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