Positive news on J&J's ustekinumab diminished by safety concerns - analysts

NEW YORK, Jun 18, 2008 (Thomson Financial via COMTEX) -- JNJ | Quote | Chart | News | PowerRating -- A positive vote on Johnson & Johnson's psoriasis treatment ustekinumab from a Food and Drug Administration panel has been somewhat tempered by concerns over the treatment's safety profile, analysts said Wednesday.

On Tuesday, the FDA's Dermatologic and Ophthalmic Drug Advisory Panel voted unanimously to approve the use of the injectable drug for the treatment of plaque psoriasis, a severe skin disease.

As the FDA usually follows the recommendations of its advisory panels when reviewing new drugs for approval, it is anticipated that the regulatory body will approve the drug in the fourth quarter, analysts said. But concerns over the drug's carcinogenic potential and the panel's recommendation that the drug be administered only by a physician and not directly by the patient could diminish enthusiasm over ustekinumab and lessen the drug's potential market share.

Citigroup, which rates J&J at buy, said it expects the drug's usage to be more conservative and that the concerns about cancer risk could hamper uptake until long-term data addresses the concern more fully.

The firm lowered its estimates for ustekinumab based on expectations of lower penetration of the psoriasis market. Citigroup now expects revenue to be $19 million less in 2008 and $260 million less in 2009 than originally forecast.

Wachovia, which rates the company at market perform, said the advisory panel voted 7-4 in favor of administration of the drug only by a physician. This limits the dosing advantage of ustekinumab, which is dosed every 12 weeks compared to self-administered doses every week for competitor drug Enbrel and every other week for competitor drug Humira.

"If this recommendation stands, we think it will hinder the uptake of the drug," the firm said.

Wachovia lowered its forecasted growth for the drug because of the limited long term safety data and the reduced convenience. The firm now expects ustekinumab sales of $130 million in 2009, $277 million in 2010, $433 million in 2011 and $614 million in 2012, down from previous estimates of $219 million in 2009, $483 million in 2010, $804 million in 2011 and $1.01 billion in 2012.

J&J shares closed at $65.59 on Tuesday. Christie Rizk cr/pc

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