Orphan Miasma Envelops Chiasma As FDA Seeks New Trial

| About: Chiasma (CHMA)

Achieving US approval of an orphan drug on the basis of a single-arm trial is not necessarily the easy win many executives and investors like to suppose. That is the lesson of Chiasma (NASDAQ:CHMA), which saw its acromegaly pill rejected because it lacked a control group, setting the company back by at least two years.

The Massachusetts-based group is fortunate in one way, in that it has just initiated a double-arm trial aimed at a European filing. However, executives said they will not know if that design can be sufficiently altered to address FDA concerns until they can meet with regulators. In the meantime, a cost-cutting plan to stretch Chiasma’s cash runway is in the offing.

More study needed

Shares fell 63% to $3.75 yesterday, following the group’s announcement after Friday’s market close of the FDA complete response letter for Mycapssa, and an unusual, second press release yesterday providing further details about the regulators’ request of a new trial.

The company said the FDA wants a double-blind, randomized, controlled trial. The Mpowered study for European approval is an open-label trial comparing Mycapssa, an octreotide acetate pill, with injectable somatostatin analogues, so a substantial amendment may need to take place for Mpowered to meet the FDA’s requests.

Chiasma’s chief executive, Mark Leuchtenberger, said FDA officials did not raise any objections to the single-arm design of the phase III US-targeted trial before it was initiated, nor did they say the design would prevent the filing of a new drug application, although the “interpretability and sufficiency of the results” were flagged as a review issue.

Nonetheless, the group now is looking at remaining a developmental stage company for a couple more years, requiring some cash conservation. Mr. Leuchtenberger said its $134m cash pile at March 31 would have been sufficient to fund its commercial plan through the end of 2017 had the FDA approved its candidate.

Making orphans of orphans?

Given the pace of the last few years, it may come as some surprise to pharma observers that so far in 2016 there has been just one US approval of a new agent that carries an orphan drug designation – that was Elusys Therapeutics’ anthrax treatment Anthim, a product that will be mainly sold to the government.

This is well off the pace of 2014 and 2015, which saw approval of a total of 26 small molecule or biological agents with orphan indications approved (see table).

FDA orphan approvals, 2014-present
FDA Approval Date Company Product
18 March 2016 Elusys Therapeutics Anthim
21 December 2015 Actelion Uptravi
16 November 2015 Johnson & Johnson Darzalex
23 October 2015 Johnson & Johnson Yondelis
27 August 2015 Amgen Repatha
2 July 2015 Vertex Pharmaceuticals Orkambi
17 March 2015 Retrophin Cholbam
6 March 2015 Basilea Pharmaceutica Cresemba
23 February 2015 Novartis Farydak
13 February 2015 Eisai Lenvima
23 January 2015 Shire Natpara
19 December 2014 AstraZeneca Lynparza
15 October 2014 Roche Esbriet
15 October 2014 Boehringer Ingelheim Ofev
4 September 2014 Merck & Co Keytruda
19 August 2014 Sanofi Cerdelga
23 July 2014 Gilead Sciences Zydelig
3 July 2014 Spectrum Pharmaceuticals Beleodaq
6 June 2014 Biogen Eloctate
29 April 2014 Novartis Zykadia
23 April 2014 Johnson & Johnson Sylvant
21 April 2014 Eli Lilly Cyramza
19 March 2014 Endo International Impavido
24 February 2014 Aegerion Pharmaceuticals Myalept
18 February 2014 Lundbeck Northera
14 February 2014 BioMarin Pharmaceutical Vimizim
31 January 2014 Vanda Pharmaceuticals Hetlioz
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One of the justifications for escalating biotech valuations in the 2012-2015 boom was the development of orphan drugs, or, more specifically, the low development costs, relative ease of approval and high profitability of these candidates.

It may be just a coincidence that the boom has receded at the same time as there has been a lull in orphan drug approvals, and a slowdown of this nature is probably not unprecedented. It is too soon to predict that the Mycapssa decision is a sign of a tougher FDA, but that will come as little balm to Chiasma investors, and could be a warning for those betting heavily in the orphan space.

Trial ID
Single-arm trial of Mycapssa NCT01412424
Mpowered NCT02685709
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