from MS... The much anticipated review by the Food and Drug...

from MS...
The much anticipated review by the Food and Drug Administration, or FDA, advisory committee of testosterone supplements has proved inconclusive. The review cited insufficient evidence linking testosterone use to an increased risk of cardiovascular events. The panel did, however, vote in favour of changing product labeling to restrict use amongst age-related low testosterone patients. Several clinical studies are now underway, including one sponsored by Eli Lilly, evaluating the impact of testosterone across a number of physiological parameters, including energy levels and drive, as well as safety. These studies should render results in the next six months.
However, a potential ruling on safety in early November by the FDA raises the prospect of more stringent product labeling or more onerous prescribing protocols which may include mandatory testing of testosterone levels before or during treatment. While the FDA is not obliged to follow the advice of its advisory panels we view both outcomes as highly likely and potentially negative to the sales trajectory of Axiron in the United States market.
We view the advisory panel’s cautionary stance on the category as negative for Axiron and have trimmed our forecasts to reflect the dampening effect of lower product demand. As a result our fair value estimate for no moat-rated Acrux moves to AUD 2.00 from AUD 2.50. This also incorporates a shift of the USD 50 million milestone payment under the Eli Lilly agreement, from fiscal 2015 to fiscal 2016. The shares remain undervalued relative to our fair value estimate but we reiterate that our fair value uncertainty rating is very high. This reflects the largely off-label use of the product and inherent demand volatility of a consumer lifestyle product.