A tiny clarification on the most positive thing Bill Ackman said during his conference call

On Wednesday Bill Ackman held a quarterly conference call for investors in his fund, Pershing Square.

And since his private funds are down 14% year to date while Pershing Square Holdings is down 18%, he didn't have that much good news to share.

Except for one thing. A new psoriasis drug from Valeant Pharmaceuticals called brodalumab. A Food and Drug Administration (FDA) advisory panel recently recommended that the agency approve the drug.

This was a "big week for the company in terms of drug developments," said Ackman, lauding the company for having one of the "most productive R&D developments of any company in the country."

You'll recall that Valeant's low R&D spending and high drug prices, combined with accusations of malfeasance from a short seller to bring the stock down around 90% since October. Since then Ackman has basically taken control of the company, stacking the board and installing a new CEO, Joe Papa. The Valeant position makes up 6% of Ackman's portfolio and is down 23.5% for the quarter.

Side effects may include...

So you can imagine that any news about new revenue streams for the company should be welcomed with gusto. And that's what Ackman did. He said that brodalumab was almost killed by its original creator, Amgen, "despite its efficacy." Valeant then bought it for $100 million and partnered with AstraZeneca to take it to market.

The advisory panel, he said, unanimously voted to recommend approval of the drug. Though there "was some disagreement about how to deal with some of the safety issues dealing with the drug."

Yeah, you bet there were. That's because the FDA's Division of Psychiatric Products found that brodalumab patients had a higher instance of suicide or suicidal ideation than patients taking other psoriasis drugs. Psoriasis, you probably know, is a dermatological issue - just a bunch of red bumps on your skin.

Wells Fargo put out a report on Wednesday morning discussing what the FDA's Division of Psychiatric Products discovered.

"Four of the patients that completed suicide in the brodalumab trials had no history of anxiety, depression, or other psychiatric symptoms. The FDA's Division of Epidemiology found a three-fold higher completed suicide rate in brodalumab clinical trials compared to other psoriasis biologics. Potential risk management options suggested included a potential for a blackbox warning and/or mandatory participation in a registry with psychiatric symptoms being monitored."

That is why, of the 18 members of the advisory panel, 14 actually decided to "approve brodalumab but only if certain risk management options for suicidal ideation and behavior."

Only 4 "approve(ed) brodalumab with labeling alone to manage the risks."

Wells Fargo thinks this may limit the number of people who want to use the drug because it will require a Risk Evaluation and Mitigation Strategy and a restricted label.

So there's your good news.