Company also hit by class-action lawsuits related to stock declineSonus Pharmaceuticals moved its EchoGen ultrasound contrast agent an important step closer to U.S. approval with the filing of an amendment for the product's new drug application
Company also hit by class-action lawsuits related to stock decline
Sonus Pharmaceuticals moved its EchoGen ultrasound contrast agent an important step closer to U.S. approval with the filing of an amendment for the product's new drug application with the Food and Drug Administration. The announcement is good news for the Bothell, WA-based company, which has seen its stock price drop precipitously since it received a nonapprovable action letter from the FDA in February (SCAN 3/4/98).
The amendment was a complete response to the items in the FDA's action letter, said Dr. Steven Quay, president and CEO of Sonus. It included re-analysis of clinical data and other items that the company declined to discuss, Quay said.
The amendment focused only on EchoGen's echocardiography applications for opacification of the left ventricle and improvement of endocardial border delineation in patients with suboptimal echocardiograms, however. Additional clinical data supporting radiology indications for EchoGen will be submitted at a later date, when the data are completed and analyzed, Quay said. Quay declined to estimate a time frame for that submission.
The filing of the NDA amendment resolves some of the questions regarding the commercialization schedule for EchoGen, which appeared to be on the verge of market approval earlier this year until the FDA issued its nonapprovable letter. The FDA now has up to 180 days to review the amendment.
"The filing leads us to believe that we'll see U.S approval early next year, with launch in the spring," said Alex Zisson of investment firm Hambrecht & Quist of New York City.
The news last month wasn't all good for Sonus, however. The company was hit with class-action lawsuits looking to capitalize on investor frustration over a stock that has plummeted from a 52-week high of $46.88 in the fall of 1997 to under $9 a share in late August.
Law firm Milberg Weiss Bershad Hynes & Lerach filed a suit in the U.S. District Court for the Western District of Washington, alleging that Sonus and certain of its officers and directors committed violations under the Securities Exchange Act of 1934. Another suit was filed by two other firms in a Washington state court.
According to a Milberg Weiss release, the complaint alleges that a fraudulent scheme took place to misrepresent the company's patents, the status of its application for FDA clearance of EchoGen, and the safety and effectiveness of the agent. In addition, the complaint alleges that Sonus misrepresented the company's competitive position with ultrasound contrast competitor Molecular Biosystems of San Diego.
Milberg Weiss alleges that the misrepresentations caused Sonus shares to trade at an artificially inflated price during the class period, which runs from Sept. 24, 1996, to June 8, 1998. The law firm did not return phone calls requesting more details on the charges.
Quay denied that any wrongdoing by Sonus or its officers and directors had taken place, and stated that the company intends to respond vigorously to the lawsuit. Beyond that, Sonus does not comment on ongoing litigation as a matter of policy, Quay said.