Ambit Biosciences (AMBI) lost over 33% of its market cap, as of market close on December 4th, when the company reported it is not planning to file a new drug application (NDA) for accelerated approval of quizartinib. According to the FDA, the goals of the NDA are to provide enough information to permit the FDA to reach the following key decisions:
- Whether the drug is safe and effective in its proposed use(s), and whether the benefits of the drug outweigh the risks.
- Whether the drug's proposed labeling (package insert) is appropriate, and what it should contain.
- Whether the methods used in manufacturing the drug and the controls used to maintain the drug's quality are adequate to preserve the drug's identity, strength, quality, and purity.
The documentation required in an NDA is supposed to tell the drug's whole story, including what happened during the clinical tests, what the ingredients of the drug are, the results of the animal studies, how the drug behaves in the body, and how it is manufactured, processed and packaged.
So what went wrong?
The simple version is the FDA feedback made the company believe that a NDA for quizartinib would not be approved with the current results of Phase 2 trials. This requires Ambit to proceed with plans for Phase 3 clinical trials and these are very costly and time consuming.
The longer version is the FDA disagreed that complete remission with incomplete hematologic recovery represents a novel surrogate study target that would be reasonably likely to predict a clinical benefit for the treatment.
Nevertheless, Ambit is committed to moving forward and will be presenting data from quizartinib at the ASH 55th Annual meeting in New Orleans, LA on December 9, 2013.
Results of Phase 2 Randomized, Open-Label, Study of Lower Doses of Quizartinib in Subjects with FLT3-ITD Positive Relapsed Acute Myeloid Leukemia (AML): The purpose of this study is to assess the efficacy and safety of lower doses of quizartinib in the treatment of patients 18-years or older with relapsed/refractory FLT3 ITD positive AML to further improve the benefit:risk assessment of quizartinib. The data will be presented by Dr.Jorge Cortes at 3:00 pm CT on Monday, December 9, in the La Nouvelle Ballroom C.
Quizartinib Can Be Safely Combined With Conventional Chemotherapy In Older Patients With Newly Diagnosed Acute Myeloid Leukemia: Experience From The AML Pilot Trial: This is the first presentation of quizartinib use in combination with chemotherapy in newly diagnosed older AML patients, testing the feasibility and dose which could be given sequentially following conventional chemotherapy in patients over the age of 60 years. The data will be presented by Dr. Alan Burnett at 5:15 pm CT on Monday, December 9, in the La Nouvelle Ballroom C.
Results of Phase 1 Study of Quizartinib In Combination with Induction and Consolidation Chemotherapy in Younger Patients with Newly Diagnosed Acute Myeloid Leukemia: This dose escalation study is the first to report data on quizartinib in combination with standard induction and consolidation chemotherapy in patients between the ages of 18 to 60-years with newly diagnosed AML, regardless of FLT3 status. The data will be presented by Dr. Jessica Altman at 5:30 pm CT on Monday, December 9, in the La Nouvelle Ballroom C.
A Phase I Study of Quizartinib in Combination with Cytarabine and Etoposide in Relapsed/Refractory Childhood ALL and AML: A Therapeutic Advances in Childhood Leukemia & Lymphoma Study: This was the first clinical trial using quizartinib in children between the ages of 1 month and 21-years with relapsed/refractory AML or MLL-rearranged ALL. The data will be presented by Dr. Todd Cooper at 5:45 pm CT on Monday, December 9, in the La Nouvelle Ballroom C.
Ambit Biosciences says they will continue to work with the FDA to achieve the goal of bringing the treatment to market for FLT3 ITD positive AML patients who have relapsed or who are refractory to prior treatments.
Ambit is in good financial shape with revenues of $25.8 million for the nine months ended September 30, 2013. They also had cash and equivalents of $78.9 million at the end of the same period primarily from an IPO that raised $58.1 million and a private offering that raised $25.1 million. Total liabilities for the period ending September 30, 2013 were $22 million so Ambit has more than enough financial strength to meet all short term liabilities with a current ratio of 3.6.
The drop in the stock price seems excessive. Citi rates the stock as a buy with a target price of $17 and Leerink Swann has an outperform rating with a target price of $14. The stock was downgraded by BMO Capital from outperform to market perform on December 4, 2013. I believe the stock will rebound after the shock of the announcement has worn off. Investors will realize that an important new drug for the treatment of leukemia is still making progress. Ambit is trading at only 5x 2013 revenues compared to a stock such as Onyx that was bought out by Amgen for over 28x 2013 revenues.
Ambit could be a good addition to a speculative portfolio, either as a long term holding or a takeover target, especially at the current price of $8.56 as of market close on December 4, 2013.