Sonus gets warning letter from FDA for activities related to EchoGen agent

April 15, 1998

Analyst says letter probably won't delay EchoGen's reviewSonus Pharmaceuticals' problems with the Food and Drug Administration appear to be getting complicated. The agency added insult to injury on March 26, when it issued a warning letter to

Analyst says letter probably won't delay EchoGen's review

Sonus Pharmaceuticals' problems with the Food and Drug Administration appear to be getting complicated. The agency added insult to injury on March 26, when it issued a warning letter to Sonus regarding statements that the FDA said constitute promotion for the company's ultrasound contrast agent, EchoGen, which has not yet been approved.

Specifically, the FDA accused Sonus of disseminating promotional materials that contain statements or suggestions that are false or misleading. The agency gave the company until April 9 to come up with a written plan for taking corrective action.

The warning letter came on the heels of a not-approvable letter regarding EchoGen, issued in mid-March (SCAN 3/18/98), and just weeks before a scheduled meeting on April 27 with FDA officials to discuss the submission of data that might spring EchoGen from regulatory limbo. Asked about the significance of the FDA's warning letter, Terry Willard, Sonus vice president of marketing and business development, said that the FDA was concerned that Sonus has been engaged in pre-approval promotion for EchoGen.

"We are working very closely with the FDA to answer the concerns in the letter," he said. "We expect to make the April 9 deadline for a written response to the FDA."

FDA officials were not available for comment regarding the letter or its significance. But industry analyst Alex Zisson of Hambrecht & Quist in New York City dismissed the suggestion that the warning letter might have either serious or long-term consequences for the company.

"It's not at all important," Zisson said. "There are a hundred warning letters that companies routinely get."

Sonus was nabbed as part of a routine monitoring and surveillance program being conducted by the FDA's Division of Drug Marketing, Advertising, and Communications (DDMAC). Four violations were noted. These were advertisements and articles published in October 1997 in a Sonus-sponsored supplement to Applied Radiology; advertisements and articles published that same month in a Sonus-sponsored supplement to Clinical Cardiology; a slide kit distributed by Sonus; and information presented on the company's Web site. The information makes claims about EchoGen that are inappropriate for a product that has not yet received FDA approval, according to the letter, which was signed by Minnie Baylor-Henry, director of DDMAC.

"Although EchoGen is an investigational new drug, the materials distributed by Sonus state or suggest that EchoGen is safe and effective for a variety of uses and that it is superior to other ultrasound contrast agents," the letter states. "Materials and activities that claim or represent in a promotional context that an investigational new drug is safe or effective for the purposes for which it is under investigation, or that otherwise promote the drug, are violative."

Despite the tone of the letter, Zisson believes that the FDA's action is fairly routine.

"This whole division, all they do is watch out for stuff like that," Zisson said. "They comb through every medical journal and every Web site and every brochure that's passed out at a conference and look for violations of the code. The problem is that the code isn't very explicit as to what crosses the line. So companies tend to be aggressive on literature, because there's no true penalty."

Zisson's position seems to be borne out by the stock market's reaction to the letter: Sonus stock has held steady in the $22 to $25-a-share range since the letter was issued. The FDA's non-approvable letter, on the other hand, prompted Sonus shares to swoon, from about $35 a share in late February to around $25.

The FDA has asked Sonus to submit a plan for correcting the violations discussed in the letter and for preventing their recurrence. Constructing such a plan might not be so easy.

"Because these violations include promotion of an investigational new drug to a large and varied audience (attendees at major scientific meetings and unknown numbers of 'hits' on its WWW site), Sonus should propose a comprehensive and multifaceted action plan to disseminate corrective messages about the issues discussed (here)," the letter states.

But Zisson believes Sonus will not have a problem filling the request. The analyst speculated that Sonus would simply have to send a letter correcting the statements to its mailing list.