As the only company to receive a positive United States Food and Drug Administration [FDA] Advisory Committee [AdCom] recommendation for a product candidate to treat obesity in 2010, Orexigen Therapeutics, Inc. (NASDAQ:OREX) appeared well positioned to receive marketing approval for Contrave [naltrexone HCl/bupropion HCI]. However, on January 31, 2011, Orexigen and its partner Takeda Pharmaceutical Company Limited (OTCPK:TKPHF) received a Complete Response Letter [CRL] from the FDA requesting new clinical data despite the 13-7 AdCom vote that Contrave’s benefits outweighed the risks back in December 2010. Shares of Orexigen, which traded above $11 following the positive AdCom vote, plummeted to a 52-week low of $2.47 and puzzled investors, who were left wondering how frequently the FDA goes against the recommendation of its AdCom members.
While the FDA usually follows advice stemming from its AdCom meetings, it isn’t required to do so. In fact, there have been several high-profile situations where the FDA has gone against such recommendations.
For example, many investors recall the volatility of Dendreon Corporation’s (NASDAQ:DNDN) stock around the time of an AdCom meeting for the company’s Provenge [sipuleucel-T] product candidate back in March 2007. Shares of Dendreon, which were trading below $5 per share before the AdCom meeting, reached $25 following a positive 13-4 vote in favor of the product’s efficacy. Several months later, however, shares of Dendreon once again traded at $5 after the company received a CRL from the FDA.
More recently, InterMune, Inc. (NASDAQ:ITMN) suffered a similar fate with its EsBriet [pirfenidone] product candidate for the treatment of mild to moderate idiopathic pulmonary fibrosis [IPF], a progressive and fatal lung disease. Despite a 9-3 AdCom vote in favor of approving the drug, InterMune received a CRL from the FDA in May 2010, causing the value of its stock to decline from nearly $50 per share to less than $10. Ironically, shares of InterMune rebounded significantly in December 2010 following a positive recommendation from the scientific body of the European Medicines Agency [EMA], which is responsible for reviewing all Marketing Authorization Applications [MMAs].
With this in mind, we tabulated the results from select FDA AdCom meetings conducted during 2010-2011 and compared the outcomes with the FDA’s ultimate decision to gauge how often the agency goes against its AdCom recommendations. For the period, we found outcomes from 27 AdCom meetings for new drug applications [NDAs]. Of the 27 AdCom meetings, the FDA has not yet ruled on seven NDAs. See Table 1 for details.
No Means No
Of the 20 AdCom meetings with corresponding decisions from the FDA, the agency agreed with all 9 of the negative AdCom recommendations and sent each of the sponsors a CRL. In other words, a “no” vote from an AdCom meeting was unlikely to be overturned by the FDA during the period. This doesn’t bode well for Eli Lilly & Co.’s (NYSE:LLY) liprotamase product candidate for pancreatic insufficiency, which received a negative AdCom recommendation in January 2011 and is awaiting final FDA action.
In one situation where the AdCom vote was negative, the sponsor took action before the FDA rendered its final decision. On December 17, 2010, King Pharmaceuticals, Inc. (KG) and Acura Pharmaceuticals, Inc. (NASDAQ:ACUR) submitted an NDA for Acurox (oxycodone HCl) without niacin following a 19-1 AdCom vote in April 2010 against approval of Acurox with niacin.
Yes Means Maybe
During the period, the FDA went against the positive recommendation of its AdCom members 5 out of 10 times [50%] and issued a CRL to the sponsor. This includes one unanimous vote [13-0] in favor of the efficacy for ezogabine, which is being developed by GlaxoSmithKline plc (NYSE:GSK) and Valeant Pharmaceuticals International, Inc. (NYSE:VRX) for the adjunctive treatment of adults with partial-onset seizures. GlaxoSmithKline and Valeant indicated that the FDA cited non-clinical reasons for the CRL, but investors aren’t privy to the content of such documents.
The FDA is transparent with regard to drug approvals and withdrawals, but the contents of CRLs are considered confidential because they represent part of an ongoing dialog between the agency and drug sponsor. While many companies disclose whether or not a CRL contains a request for new clinical studies, translating into an investment of more capital and time, ambiguous phrases describing the contents of a CRL often leave investors in the dark with regard to handicapping the sponsor’s ability to address the issues in a timely and efficient manner – if at all. Such secrecy has come under fire by members of the media, as evidenced by an October 2010 Forbes article titled “Why FDA Communications Must Be Public.”
For now, investors are warned that in the face of a positive AdCom recommendation, there is only a 50/50 chance that the FDA will promptly approve a product based on recent data.
The FDA has yet to rule on 7 product candidates with recent AdCom meetings, as indicated by “TBD” under FDA Action in Table 1. While many of these AdCom meetings have positive outcomes, industry observers can flip a coin to determine whether or not the FDA will ultimately follow the AdCom’s advice in these situations based on recent data. Even unanimous, favorable recommendations from AdCom members do not necessarily guarantee success with the FDA, although both Bayer AG (OTCPK:BAYRY) and Oceana Therapeutics, Inc. (private) received such support for approval of their respective product candidates.
Investors' expectations are very high for Human Genome Sciences, Inc. (HGSI), which was among the largest percentage gainers in the NASDAQ Composite with a staggering quadruple-digit return of +1,342% in 2009 following positive Phase 3 study results with its Benlysta [belimumab] product candidate for the treatment of systemic lupus erythematosus [SLE]. The FDA is expected to render its decision by the Prescription Drug User Fee Act [PDUFA] date of March 10, 2011, and the company’s stock remains relatively unchanged around $25 per share following a positive 13-2 AdCom vote in November 2010.
Of the pending group, MELA Sciences, Inc. (MELA) appears to have the lowest probability of success with the FDA in view of the very narrow 8-7 AdCom vote in favor of the product candidate’s safety, efficacy and risk/benefit ratio, which led to new 52-week lows for the company’s stock. The company is developing MelaFind, a non-invasive and objective multi-spectral computer vision system designed to aid physicians in the detection of early melanoma, or skin cancer.
Table 1: AdCom Meetings and FDA Outcomes During 2010-2011
|Company||Product, Indication||AdCom Panel Date||AdCom Panel Voting Results||FDA Action|
|Bayer AG||gadobutrol, MRI of Central Nervous System||1/21/11||16-0 in favor of approval||TBD|
|Eli Lilly & Co.||liprotamase, pancreatic insufficiency||1/12/11||7-4 that benefits do not outweigh risks||TBD|
|Orexigen Therapeutics, Inc.||naltrexone HCl/bupropion HCI||12/7/10||13-7 that benefits outweigh risks||CRL (2/1/11)|
|Oceana Therapeutics, Inc. (private)||Solesta™, fecal incontinence||12/2/10||5-0 in favor of approval||TBD|
|AstraZeneca plc (NYSE:AZN)||vandetanib, thyroid cancer||12/2/10||10-0 in favor of a post-approval study requirement to evaluate other doses||TBD, PDUFA on 4/7/11|
|MELA Sciences, Inc.||MelaFind®, melanoma detection||11/18/10||8-7 in favor of safety, efficacy and risk/benefit ratio||TBD|
|Human Genome Sciences, Inc.||belimumab, systemic lupus erythematosus||11/16/10||13-2 in favor of approval||TBD, PDUFA on 3/10/11|
|Horizon Pharma, Inc. (private)||HZT-501, pain palliation||11/5/10||8-4 in favor that primary endpoint is adequate||TBD, PDUFA was 1/21/11, but no update from company|
|Boehringer Ingelheim (private)||dabigatran etexilate, oral anticoagulant||10/6/10||9-0 in favor of approval||Approved (10/19/10)|
|Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)||lorcaserin||9/16/10||9-5 that benefits do not outweigh risks||CRL (10/23/10)|
|Alkermes, Inc. (NASDAQ:ALKS)||naltrexone for extended-release injectable , suspension, opioid dependence||9/16/10||12-1 in favor of approval||Approved (10/12/10)|
|Jazz Pharmaceuticals, Inc. (NASDAQ:JAZZ)||JZP-6, fibromyalgia||8/30/10||20-2 against recommending approval||CRL (10/11/10)|
|Valeant Pharmaceuticals International (VRX)||ezogabine, partial-onset seizures||8/25/10||13-0 in favor of the drug’s efficacy||CRL (12/1/10)|
|AstraZeneca plc||ticagrelor, platelet inhibitor||7/29/10||7-1 in favor of approval||CRL (12/16/10)|
|Vivus, Inc. (NASDAQ:VVUS)||phentermine/ topiramate||7/15/10||10-6 against recommending approval||CRL (10/28/10)|
|Boehringer Ingelheim (private)||flibanserin, hypoactive sexual desire disorder||6/18/10||10-1 that there was insufficient evidence of overall efficacy||CRL (August 2010) and company discontinued development (10/8/10)|
|HRA Pharma (private)||ulipristal acetate, emergency contraception||6/17/10||11-0 in favor of safety and efficacy||Approved (8/13/10)|
|Novartis AG (NYSE:NVS)||fingolimod, multiple sclerosis||6/10/10||21-3 in favor of approval||Approved (9/22/10)|
|Theratechnologies, Inc. [TH.TO]||tesamorelin acetate, reduce belly fat in HIV patients||6/1/10||16-0 in favor of approval||Approved (11/11/10)|
|AstraZeneca plc (AZN)||motavizumab, respiratory syncytial virus (RSV)||6/2010||14-3 against approval||CRL (8/30/10)|
|NicOx (private)||naproxcinod, osteoarthritis||5/12/10||16-1 against approval||CRL (7/23/10)|
|Acura Pharmaceuticals, Inc.||oxycodone HCl and niacin, pain palliation||4/22/10||19-1 against approval||Will submit new NDA without niacin|
|Forest Labs, Inc. (NYSE:FRX)||roflumilast, treatment of chronic obstructive pulmonary disorder||4/8/10||10-5 against approval||CRL (5/19/10)|
|InterMune, Inc.||pirfenidone, idiopathic pulmonary fibrosis||3/26/10||9-3 in favor of approval||CRL (5/7/10)|
|ChemGenex Pharmaceuticals [CXS.AX]||omacetaxine mepesuccinate, chronic myeloid leukemia w/ Bcr-Abl T3151 mutation||3/22/10||7-1 that a well-characterized, in vitro diagnostic test is needed to identify patients with the mutation||CRL (4/19/10)|
|Cell Therapeutics, Inc. (NASDAQ:CTIC)||pixantrone dimaleate, non-Hodgkin’s lymphoma||3/22/10||9-0 against approval||CRL (4/19/10)|
|Bristol-Myers Squibb Co (NYSE:BMY)||belatacept, kidney transplantation||3/1/2010||13-5 in favor of approval||CRL (5/1/10)|
Please click here to read MD Becker Partners' legal disclaimer.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.