In development stage biotech, FDA decision dates are what everything leads up to. Interim and top line data releases will always impact the near term capitalization of a company, but nothing makes or breaks its fortunes like an approval or a decline. Here are two companies with approval dates scheduled for before the end of the year, alongside a discussion of the treatments in question.
Eagle Pharmaceuticals Inc. (NASDAQ:EGRX)
On April 14, 2015, the FDA reported its acceptance of an NDA for bendamustine, Eagle’s lead pipeline candidate with an indication of chronic lymphocytic leukemia and non-Hodgkin’s lymphoma. The drug is an alternative version of an already approved therapy, Treanda, currently marketed by generics king Teva Pharmaceutical Industries Limited (NYSE:TEVA). Eagle has a pretty unique business strategy. Basically, it targets the date at which the first generic drug becomes available for a particular indication, and attempts to improve on the reference drug with an improved delivery system. In this instance, it is seeking to provide a prepackaged, pre-mixed version of Teva’s Treanda, which is what the company calls “rapid infusion” – i.e. it takes 10 minutes to administer rather than than traditional 30 minutes.
The great thing about this approach is that the company is not altering the administered compound, so efficacy is much easier to demonstrate in a clinical trial setting. As is safety and tolerability, assuming dosing remains comparable. All the company needs to show is that its new delivery system can demonstrate efficacy as defined by non-inferiority to the treatment it is looking to replace.
Interestingly, and of considerable note, is that back in February Teva picked up the commercial rights to Eagle’s rapid infusion bendamustine for $30 million up front and up to $90 million milestone. Why is this interesting? Because it shows that Teva feels Eagle’s version of its own Treanda could be a real threat to Treanda’s ability to generate revenues. If it didn’t view it as a threat, it wouldn’t have paid triple digit millions to commercialize it.
The PDUFA date (i.e. the date on which we will get the FDA’s decision) is December 13 – so keep an eye on the company’s press releases between now and then. We will likely get a panel recommendation before the end of November, and this will offer insight into the likelihood of approval. One to watch.
Merck & Co. Inc. (NYSE:MRK)
At the beginning of this week, we learnt that an FDA panel had recommended the approval of Merck’s drug sugammadex – a treatment used to reverse the effects of muscle relaxants used in patients undergoing surgery. The treatment is already available in close to 100 countries across the globe, but the FDA keeps rejecting it through concerns of its safety profile. This is the fourth time Merck has submitted an NDA for consideration, and the FDA has set a PDUFA date of December 19. There are a few of these sorts of drugs around, but they have pretty dangerous risk profiles and severe adverse events are common. The current options require the co-administration of what’s called a muscarinic receptor antagonist, and it is this element of the administration that leads to complications. Merck’s treatment does not, and so if approved, could be a real blockbuster product for the company.
As mentioned, the FDA advisory panel recommended approval (unanimously) but don’t take this as an indication of a sure fire marketing go-ahead. An advisory panel recommended the FDA approve the drug last time around (April 2015) and the same could easily happen again. What its going to come down to is whether the FDA believes that the safety issues associated with this treatment are fewer, or less severe, than the safety issues associated with the alternatives. According to the FDA, allergic reactions and bleeding are two of its primary concerns. Merck will have no doubt included data in its NDA that it hopes will alleviate these concerns – perhaps comparable data that shows higher levels of these reactions in alternative treatments. If it can demonstrate higher or similar levels of both allergic reactions and site bleeding in the currently available co-administered relaxant reversals, sugammadex could be in with a real chance. Again, keep an eye on December 19 for this one. If approved, Merck expects annual revenues in the region of $500 million by 2020, so a long awaited approval could translate to a moderate, but still significant, upside catalyst in the company’s market capitalization.