Oral Rheumatoid Arthritis Market Remains Open As FDA Questions Efficacy Of Pfizer's Pill

| About: Pfizer Inc. (PFE)

Early May 7, 2012, the US Food & Drug Administration (FDA) posted its briefing documents for Pfizer Inc.'s (NYSE:PFE) new drug application (NDA), tofacitinib, for the treatment of adult patients with moderate to severe rheumatoid arthritis (RA).

Briefing documents contain the FDA's review of a drug and provide focus for advisory committees by suggesting discussion topics and voting questions. The Arthritis Advisory Committee is meeting May 9, 2012, from 8 am until 5 pm, to discuss tofacitinib. Up until now in the development and regulatory process investors have only heard the sponsor's positive spin extolling the virtues of their drug in the most positive light. The briefing documents are often the first time the public learns about the failings of trial designs or shortcomings of the drugs themselves. Ugly warts are exposed and surprises are not uncommon. Tofacitinib offers both.

As explained in a previous article, Pfizer is hoping tofacitinib can muscle its way into the lucrative RA market and capture meaningful sales largely on the strength of its convenience (it's a pill) compared to the current market-leading drugs which are either self-administered injections or intravenous infusions. With Pfizer claiming their drug had similar efficacy to the market leader, Humira, by Abbott Laboratories (NYSE:ABT), it looked as though this would be a decision of convenience vs. safety. However, the FDA's reanalysis calls some of Pfizer's data into question.

The Surprise: Efficacy

Pfizer is seeking approval for 5 and 10 mg strength doses and submitted efficacy and safety data from five trials as supportive evidence. However, Pfizer's data comes from a smaller set of patients than the set the FDA would have included. The FDA states (on page 11):

Pfizer's primary analysis population definition differed from the intent-to-treat (ITT) population in that the primary analysis was done on the "Full Analysis Set" (FAS), which included all patients who were randomized, and received at least one dose of study drug, AND who had at least one post-baseline measurement. Thus the FAS population denominator changed depending on the outcome measure being analyzed.

The FDA next proceeds to discuss the 'missing data' and their impact on each of the following study endpoints:

1. The DAS (Disease Activity Score)-28 is a measure of disease activity in RA in 28 joints. In Pfizer's analysis, this metric was statistically significant for both doses in four of the five studies. In the FDA's analysis using the ITT population the 5 mg dose fails to reach statistical significance in two additional studies, meaning it was only successful in two of the five studies. Results of the 10 mg dose did not change.

2. The Van der Heijde modified Sharp radiographic scoring method grades the presence of erosions in the joints of the hands and feet, and the presence of joint space narrowing in the hands, wrist, and feet. Pfizer's analysis of this outcome in one study excludes 21 (13%) placebo patients, 44 (14%) patients in the tofacitinib 5 mg group, and 24 (8%) patients in the 10 mg group. The FDA does not feel the amount of missing data is excessive but does say this makes it difficult to rule out a major impact of missing data on the overall results (page 15) and is particularly important in determining the overall benefit-risk profile of tofacitinib, which is associated with serious safety concerns. From the FDA (page 4):

Radiographic progression may occur in people who have very low apparent disease activity and patients with clinical disease activity may have no evidence of radiographic progression. Thus, documentation of a benefit of treatment on structural damage progression has been an important goal of clinical development programs for new products proposed for RA, particularly if the product has a novel target. This has become an increasingly important aspect of the risk-benefit assessment for new RA treatments in light of the many approved treatments that have documented beneficial effects in inhibiting structural damage progression.

3. The HAQ-DI (Health Assessment Questionnaire-Disability Index) is a measure used to assess a patient's level of functional ability. The FDA reanalyzed this endpoint by treating missing data differently than Pfizer did and it resulted in one of the studies being dependent on the outcome of the radiographic results, already questioned above.

4. The ACR20 is a metric showing the percentage of patients demonstrating at least a 20% improvement in certain criteria. There was no difference between Pfizer's and the FDA's results for this endpoint.

The Ugly Wart: Malignancy

There is little surprise the briefing documents state the data suggests treatment with tofacitinib is associated with an increased risk of serious infections, including opportunistic infections, like tuberculosis. Many RA drugs suppress the immune system and carry similar warnings in their labels as a result. What is troubling is the data suggests tofacitinib is associated with an increased risk of malignancy.

The FDA examined malignancies by 6-month time intervals across studies in Pfizer's RA clinical development program and found an increasing trend when comparing the first 12 months versus the second 12 months and the final 12-month period. They felt the pattern is consistent with a scenario where increasing exposure to tofacitinib increases the risk of malignancies (page 18). There also appears to be an increased risk of lymphoma in particular and increasing the dose may also increase the risk (page 27).

As a new molecular entity targeting a novel pathway in RA, tofacitinib may have a unique benefit-risk balance that cannot be inferred from previous experience with other products approved for RA. Substantial evidence to support a salutary effect of tofacitinib for structural damage progression becomes even more important in light of the aforementioned malignancy concerns, particularly since other therapies for RA are available that may not have a similar malignancy risk (page 28).

The label for marketed Enbrel specifically says malignancy rates do not increase with extended exposure. The Humira label makes no such claim but it seems reasonable to assume it would be mentioned if there were a concern. It should not be surprising these drugs have different side effects though as they have different targets (TNF-inhibitors versus JAK-inhibitor).

Further, the current market leading drugs like Humira, Enbrel, and Remicade are all biologics (drugs created using biological instead of chemical properties) while tofacitinib is a small molecule (created via chemical synthesis). The takeaway here is there are other treatment options already approved that are at least as effective and are, perhaps, safer.

Competitive Door Likely Remains Wide Open

Previously, I felt the panel would recommend the FDA grant approval but with restrictive labeling. Now having read the briefing documents I'm less sure. Even if the panel recommends approval investors should pay close attention to the discussion surrounding the efficacy claims. If it sounds like this issue has legitimately been brought back to the table then the final approval decision will weigh convenience vs. safety and effectiveness. In a title fight with the FDA as the judge, where do you feel comfortable putting your money on this one?

Regardless of the panel vote and eventual FDA approval decision it is likely the door for other companies developing oral treatments for RA remains wide open. Rigel (NASDAQ:RIGL), Vertex (NASDAQ:VRTX), Incyte (NASDAQ:INCY), Chelsea (NASDAQ:CHTP), Galapagos (OTCPK:GLPYY), and Abbott may all be farther behind Pfizer in the clinical and regulatory process but there is still ample room to improve upon tofacitinib and capture a sizable chunk of the RA market.

Disclosure: I am long CHTP.