Piper Jaffray downgraded Pozen (POZN) to market perform from outperform.
Yesterday the FDA issued the company a not-approvable letter concerning its new drug application for MT 100 for the acute treatment of migranes. Analyst Sandeep Bhatia says he thinks safety concerns are driving the FDA's decision. He believes the rejection is based mainly on 1) the drug missed the two-hour endpoint for superiority over a control arm on pain response in a study, (2) lack of superiority over component naproxen for sustained pain relief; (3) the carcinogenicity risk is based on a two-year rat study.
Bhatia says he had expected an approvabale letter for MT100 leading to an approval and partnership in the second half of 2004. He revised the 30 cents 2004 EPS estimate to a 35 cents loss, and trimmed the $17 target to $8.