Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) was a big mover at the end of this week as the company put out its fourth-quarter 2017 financials. The numbers aren’t really what’s driving action however. Instead, the real focus of the markets right now is on a development pipeline update related to one of the company’s lead investigative assets.

Specifically, Teva reported alongside its fourth-quarter earnings that there is an expected delay on its Biologics License Application (BLA) for a drug called fremanezumab, which the company is trying to get approved as a preventative treatment for patients that suffer from cluster headaches.

This is a large unmet need in the US right now and analysts have pitched the sales potential for this drug at somewhere in the region of $1 billion annually if and when it picks up regulatory approval from the FDA.

The data that underpins the application is relatively strong and, until now at least, there didn’t seem to be any real reason why the agency would turn the asset down.

So what just happened?

Teva expects that there will be a delay on the application with the delay rooted in the fact that Celltrion, which is the company’s sole source for API (active pharmaceutical ingredient) production (as relates to this drug specifically but also for much of the company’s wider pipeline and portfolio) based in South Korea, received a warning letter from the FDA.

Exactly what the warning letter said is unclear but the implications of it are relatively straightforward – the manufacturer is going to have to make some changes and subject itself to an FDA inspection before it is cleared for the provision of API to a company like Teva.

In turn, then, this means that it’s unlikely that the FDA will accept the BLA in its current iteration (we say unlikely, though it’s pretty much a certainty), so Teva is going to have to wait until the inspection clears the facility before it can expect a regulatory green light.

Back on December 18, 2017, Teva reported that the FDA had awarded priority review for the BLA, setting the asset up for a PDUFA date in mid-June, 2018.

The latest news will undoubtedly push that PDUFA back and actually how far remains to be seen.

Some other the big news out of the biotechnology space last week came from Madrigal Pharmaceuticals Inc (NASDAQ:MDGL).

This is one of those biotechnology companies that qualifies as a billion-dollar entity (market capitalization at last count was $1.84 billion) but that remains off the radar for many investors.

However, with the latest development from Madrigal, there’s a good chance the company will have flagged up on numerous screeners.

On Thursday, the company announced data from a phase 2 trial of one of its lead development assets, a drug called MGL-3196, which is currently under investigation for the treatment of patients in patients with heterozygous familial hypercholesterolemia (HeFH).

This is a condition is rooted in high cholesterol and right now, standard care treatments generally only work for a short period of time before becoming useless. This means it’s a very large market in both the US and Europe (two of Madrigal’s primary target markets) and, in turn, a real opportunity for revenue growth if the company can pick up a regulatory approval for the drug.

So what did the data tell us?

Well, it’s sort of 50-50 as things stand.

The trial met its primary endpoint, with MGL-3196 treated patients achieving a highly significant (p< 0.0001) LDL-C lowering of 18.8%, and 21% LDL-C lowering in those on an optimal dose of MGL-3196.

However, there are numerous assets currently under investigation, some of which are being trialed by big names in the sector, which have shown slightly more promising early-stage data. As a result, even though the trial met its primary endpoint and technically this is a positive development for the company, shareholders have traded down on Madrigal to the tune of around 10% post announcement.

We may see a near-term recovery heading into the close of this week as markets pick up cheap shares in anticipation of an advance into late-stage trials.

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