Omapro’s speedy run through approval has slowed to a walk. Negative comments from FDA reviewers coupled with snow in Washington have changed the game for the first-in-class chronic myeloid leukaemia (CML) treatment, and with it, ChemGenex Pharmaceuticals’ (OTC:CXSPY) market fortunes.
Briefing materials released ahead of the FDA’s oncological drugs advisory committee’s scheduled meeting on Februuary 10, cast doubt on the single 66-patient study ChemGenex used to support the application for Omapro, causing the Australian company’s shares to tumble more than 19%. And not long after the FDA on Monday released its negative assessment, the adcom was postponed because of snow. With no new date announced this leaves ChemGenex in limbo, an insecure position for a company with a dwindling cash reservoir, no products on the market and no partner to fall back on in the US, should more trials be required.
Fail to respond
Omapro (omacetaxine mepesuccinate) targets CML in patients who fail to respond to tyrosine kinase inhibitors (TKI) Gleevec, Sprycel or Tasigna and who have a T315I mutation. In its FDA submission, ChemGenex estimates that 250-300 people in the US are diagnosed with the T315I mutation, a number that it says will increase with greater use of Sprycel and Tasigna. An estimated 2,000 a year in the US and Europe will fail on TKIs because of the mutation (Event – ChemGenex’s Omapro awaiting panel scrutiny, January 15, 2010).
A pivotal phase II open-label study ChemGenex submitted as part of the FDA application showed that 25%, or 10 of 40, enrolled patients with the chronic phase of the disease achieved a major cytogenetic response and 85% achieved a haematological response. Results were not as good for those with the accelerated phase or blast phase. Just one of the 16 accelerated phase patients achieved a major cytogenetic response, and none of the 10 blast phase patients did. Six of the accelerated phase patients and three of the blast phase patients achieved a haematological response.
Furthermore, ChemGenex touted Omapro’s safety profile, saying the predictable adverse events of thrombocytopaenia, anaemia and neutropaenia were reversible and managed by reducing dosing days per cycle or delaying dosing.
However, the FDA’s staff report challenged ChemGenex’s submission, saying that the company had planned to enrol 100 but only achieved an enrolment of 66; that there is no commercially available assay for the mutation and ChemGenex did not submit data on their detection methods; that 35% of the patients did not have confirmation of the mutation when they enrolled; and that the efficacy rate was low.
In Europe, where a regulatory decision is due in the next couple of months, ChemGenex has partnered with Hospira (NYSE:HSP) to commercialise Omapro, which resulted in a A$17.8 million ($15.6 million) fee with the potential for another $104 million in royalties and milestones. That fee undoubtedly gave the company some financial breathing room as it awaits various regulatory approvals.
But in the US, ChemGenex so far has decided to go it alone, a decision they may regret if the adcom agrees with the FDA's concerns. Analysts from ABN AMRO Morgans forecast the company will have $13m in cash at the end of its fiscal year June 30.
The decision to commercialize in the US is certainly a gamble with a huge upside for a company with a $207 million market cap: the ABN AMRO Morgans analysts estimate a minimum price of $50,000 a year, generating minimum annual revenues of $12.5 million a year for that indication. And there is some suggestion that the company might be able to expand indications for the drug.
The downside is that should the FDA ask for more data on Omapro, ChemGenex may be forced to reconsider that decision at a time when they are not in a strong bargaining position with potential suitors. With one other product in the late-stage pipeline and eight projects in the pre-clinical or research project stage, it will likely be in need of income should Omapro be delayed.
Omapro received orphan drug status in January 2009 and since then its march toward regulatory approval has been fairly rapid. However, the combination of negative reviews and unpredictable delays has heightened the suspense over the approval, and surely must be making ChemGenex executives rethink their US business strategy.