Oscient Shares Rise Despite Safety Issues

© 2006 The Associated Press

WASHINGTON — Shares of Oscient Pharmaceuticals Corp. gained in heavy trading Monday, possibly on speculation that the company could receive positive review for a new use of its drug Factive, despite news that the Food and Drug Administration has safety concerns about the drug.

An FDA panel of experts is scheduled to vote Tuesday on whether the drug, which is currently used to treat certain types of pneumonia and bronchitis, should be used to treat acute sinus infection. More than 30 million adults and children get sinus infections each year, according to the National Institutes of Health. There are concerns the FDA panel might decide not to recommend the sinus infection use for this drug.

According to documents released Monday by the FDA before the panel meeting, patients taking Factive were more likely to develop an allergic rash than those taking other approved products.

JMP Securities analyst Adam Cutler noted that in the briefing documents FDA staff scientists recommended against approving the drug for the new use.

"It's probably a long shot that the committee will recommend approval," Cutler said.

Shares of Waltham, Mass.-based Oscient rose 8 cents, or 7.3 percent, to $1.17 on the Nasdaq in midday trading. In the year to date, the stock has lost nearly half of its value.

Competitor Replidyne Inc. of Louisville, Colo., is also seeking to have the same use approved for its drug Faropenem. Replidyne shares lost 15 cents to $9.90 on the Nasdaq.

Merrill Lynch analyst David Munno said in a note Friday that Faropenem does not carry the same safety concerns as Oscient's drug.

According to Munno, FDA could make a decision on Replidyne's drug by Oct. 20.

Factive is a broad spectrum (different bacteria) antibiotic. It works by inhibiting proteins within the bacteria that regulate it's DNA replication (DNA gyrase and topoisomerase IV). If the bacteria can't replicate, it can't infect you enough to make you sick.