Watson Pharma and Columbia Labs Plunge on Proposed FDA Review

Shares of Watson Pharmaceutical

and Columbia Labs

saw much weakness right after 1:30 p.m. ET after headlines crossed saying that the FDA is reviewing their pre-term birth gel. Back in April, announced that Columbia has submitted a New Drug Application to the FDA for PROCHIEVE (progesterone gel) for the reduction of risk of preterm birth in women with short uterine cervical length in the mid-trimester of pregnancy. It was confirmed that Watson would acquire the U.S. rights to Columbia's CRINONE and PROCHIEVE product line and 11,200,000 shares of Columbia common stock, back in June. Today, headlines said that the pre-term birth gel did not demonstrate statistically significant efficacy in users, according to the FDA. After the news broke, shares of both Watson and Columbia Labs fell on heavy volume, with Columbia eventually halted as circuit breaker was triggered. Currently, shares of Watson Pharma are down over 2% at $60.29 and Columbia is down over 30% at $1.60.