Ebb & Flow

The first regulatory setback isn't the knockout punch for Oxford GlycoSciences(LSE:OGS; OGSI), which fell 92.5p (24%) to 300p on Monday after receiving a non-approvable letter from the FDA for its Vevesca (OGT 918) to treat Gaucher disease. But with the company's current market cap now approximating its cash on the balance sheet, Vevesca's value has been virtually removed from the stock.

According to OGS, the FDA said there was not sufficient support for the safety and efficacy of the compound (see B6). Nevertheless, Vevesca is still under review in Europe, and OGS expects a decision in the third quarter.

"We do still have grounds on which to move forward and will meet with the FDA at the earliest occasion," CFO Stephen Parker told Ebb & Flow. "We have additional data that FDA has not yet seen that may prove to answer some of its concerns. The additional data includes neurological baseline measurements from some of the patients entering the New York trial which started last July and now has all 11 patients enrolled."

But if Vevesca isn't approved, there's nothing behind it in the clinic. "We do have a gap in our pipeline and have for some time been looking at the possibility of either product or company acquisitions," said Parker. "Our core therapeutic areas are cancer, infectious diseases and glycolipid storage disorders."

OGS has some cash to work with. At the end of 2001, it had £176.6 million ($260.8 million) in cash and an expected burn rate of £30 million ($45 million) for 2002.

OGS closed Friday down 125p (32%) at 267.5p and a market cap of £148 million ($221 million). On NASDAQ, OGSI was down $1.61 (30%) to $3.79 on the week.

Genzyme (GENZ) got a slight bump from the news, trading up $0.30 to $19.24 on the week after adding $0.32 to $19.26 on 10.6 million shares on Monday. The news means less fear of a near-term threat

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