Aradigm Corporation (NASDAQ:ARDM), Theravance Biopharma, Inc. (NASDAQ:TBPH) and Mylan NV (NASDAQ:MYL) are all hitting headlines with each putting out an update relating to one of their respective development programs.

Here’s a look at the news and what it means for all three companies.

Aradigm

This one is rooted in the release of a regulatory update from one of the company’s lead development programs. The program is set up to investigate the safety and efficacy of a drug called Linhaliq.

Aradigm is trying to get Linhaliq approved as a treatment for non-cystic fibrosis bronchiectasis (NCFBE) patients with chronic lung infections caused by Pseudomonas aeruginosa (P. aeruginosa). P. aeruginosa causes chronic infections and is the leading cause of death by Gram-negative bacteria. It also affects people without cystic fibrosis and it’s this population that’s the target for Aradigm and Linhaliq.

In many individuals, it’s not an issue. In patients with weakened immune systems, however, it can be extremely deadly, nearly always the case with bronchiectasis sufferers. This sets up a substantial unmet need in the US right now.

Unfortunately, it doesn’t look like Aradigm is going to be the company that fills this unmet need with Linhaliq – at least not anytime soon. As per the latest news, the FDA is expected to issue a Complete Response Letter (CRL) on the drug’s New Drug Application (NDA) this week, with the response letter suggesting that a further phase III trial is necessary to shore up the application.

And not only that – the agency has also recommended that the phase III should span at least two years if it is to satiate the shortfall in data that exists in its current application.

When a company picks up a CRL, it’s not always terrible news. If it’s an easy fix, something like a short-term safety study or a human error investigation, then it’s not too much of a setback for the company.

When a brand new phase III is required, however, it’s generally a real blow, since it costs a lot of money to conduct a phase III and oftentimes these companies don’t have a lot of free capital on their balance sheet – as is the case here.

Add in the fact that the phase III is recommended to last at least two years and the implications become even more severe.

Markets are recognizing this fact and trading down on the company. At the close of trade on Monday, Aradigm plummeted 29%.

Theravance and Mylan

This one involves both companies. News hit press on Monday that the FDA has accepted an NDA for an asset called revefenacin (TD-4208), which both are trying to get approved as a once-daily, nebulized bronchodilator for the treatment of chronic obstructive pulmonary disease (COPD).

This is an asset that forms the basis of a long-standing partnership between the small cap and the healthcare behemoth and it’s one that has produced some pretty strong data over the last twelve months.

In particular, and noteworthy because it serves as the basis for the NDA that the FDA just accepted for review, is this phase III data investigating the impact of two different doses of the drug versus placebo.

The data demonstrated statistically significant and clinically meaningful improvements for revefenacin over placebo in both doses and ‍both doses of revefenacin had comparable rates of adverse events to placebo.

With these data in place, it’s tough to see a situation in which the FDA would decline the drug by decision day, meaning the drug should have a pretty smooth ride through to approval. Of course, there’s always information we’re not privy to, so there may be something in the application that causes concerns for the agency. That notwithstanding, however, we’re likely going to see positive sentiment dominate price action especially for Theravance heading into the PDUFA approval deadline.

The date to watch on this one is November 13, 2018.

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