Lev Pharmaceutical: Bullish, Despite Delayed FDA Decision

On Wednesday, January 30, the FDA sent Lev Pharmaceutical (LEVP.OB) a response letter for Cinryze which requested additional information relating to the chemistry, manufacturing and controls that the company has used as well as additional details from their phase 3 studies.

While this news is not good it is not in my opinion cause for a greater than 40% decline in the share price in the following day's trading. Based on a conference call held by Lev Pharmaceuticals on Jan. 31, the FDA is not requiring new Phase 3 trials to be conducted and is merely asking for additional information.

I am admittedly surprised that the FDA did not approve the product but I believe that the agency is simply being extremely cautious in the wake of some of the issues the agency has had with high profile drugs recently such as in the cholesterol space. Lev's treatment has been successfully used for over 3 decades in Europe and has greatly improved the quality of life of many people who suffer from HAE. Based on the conference call today it appears that a decision from the FDA will likely come at some point in the middle of the year once Lev responds to the questions posed by the agency.

Despite the significant price decline I remain confident that Cinryze has the potential to be a multi-hundred million dollar treatment. I hope to contact the firm over the next several days and learn more about the issues at hand before adding any additional capital into the company.

I am a strong believer that Lev's treatment is the safest treatment offered (as compared to competitors such as Dyax and Jerini) and offers the best chance for approval and orphan drug status.

Disclosure: Long LEVP.OB

Comments

[longjon:]

After that conference call, I'm not sure. They'd be doing themselves a favor by revealing a few more details as to what the FDA is asking for. If it were just details about the manufacturing process I'm not sure they'd be so secretive. They at least need to tell me what the FDA wants from the trials for me to have more confidence. The several million share selloff preannouncement wasn't terribly comforting either.

I'm long both DYAX and LEVP, but I'm reasonably certain that DYAX will be better in the long run, mostly because HAE isn't the whole story there. If the DYAX product is approved they can use it in CABG, which is getting significantly more popular these day

2008 Feb 08 10:27 AM

[Dan Weiss:]

Hi Jon
I appreciate your comments. I agree that the call could have been managed much more professionally, however, I think the management team was genuinely surprised by the FDA's decision to delay approval. My take is that they were not prepared to answer ?s from the audience but that they will likely become more forthcoming in coming days with their presentations at several conferences.

I am impressed with the product and dont see any reason why the FDA would not approve it once Lev answers the questions. I believe this is a case of an overcautious FDA wanting to cross their t's and dot their i's.

vestopia.com

2008 Feb 08 08:23 PM

[kahuna:]

Have two family members that have HAE and both have had access to Cinryse. This medicine works 10x10 to provide mitigation for HAE related symptoms and it provides relief within 30 minutes. To an HAE patient it is a miracle drug.. and no patient receiving this medicine has reported any adverse effects. Licensing this medicine should be a “no brainer” for the FDA.

2008 Mar 17 07:07 PM

[Dan Weiss:]

Thats what I thought as well but the FDA is being extra cautious with approvals of just about any treatments these days. I continue to expect approval of Cinryze it just may not happen until a bit later in the year. Today's news was overall very positive with an additional positive Phase 3 study result released late in the day.

2008 Mar 18 09:05 PM

[Dan Weiss:]

It looks like at this point that Lev will gain approval for the prophylactic treatment of HAE at some point later this year while the non-prophylactic treatment is still a race between multiple companies with Lev being slightly ahead. The potential revenue stream for the company is very significant for the company and well above the current capitalization of the company.

2008 Mar 24 09:25 AM

[ebeng:]

Once approved, what would prevent other companies to muscle in with their versions? If cinryze has been used in Europe for 20-30 years, it must not have any use or composition patents.

2008 Mar 26 10:20 PM

[Dan Weiss:]

Lev if they are first to the market would be granted orphan drug status thus preventing competition for a period of 7 years. Cinryze will be evaluated by the Blood Products Advisory Committee on 5/2/08.

2008 Apr 20 11:41 PM

[kahuna:]

On May 2nd a meeting of the FDA's Blood Products Advisory Committee recommended--in a stunning 21-0 vote--that the FDA approve the Lev Pharma C1 inhibitor product for "preventing" HAE attacks. The HAE Association (haea.org) had a contingent of 5 patients and a physician who spoke before the Committee and the FDA staff. The speeches made by HAE patients had a remarkable impact on the proceedings. Afterwards the Committee began asking the FDA staff pointed questions about why treatment for attacks that are underway (acute attacks) was not being considered.
The Blood Products Advisory Committee's unanimous endorsement of licensing Cinryze in the United States is a huge win for Lev Pharma and HAE patients in the United States.

2008 May 15 08:21 PM

[Dan Weiss:]

The full FDA will still need to approve Cinryze and it looks like an action date will be in the early fall.

2008 May 22 08:32 PM

[Dan Weiss:]

Another buy initiation on the stock just a couple of days ago this time by Jefferies who sees the stock in their words with a conservative valuation of $3 per share. Also, the company has struck a deal with CVS to help commercialize Cinryze once its approved by the FDA.

2008 Jun 06 11:13 AM

[Dan Weiss:]

The stock has had a nice rebound doubling from its lows just a few months ago and returning to prior levels. I have been in constant contact with the company and it looks as if prophylaxis approval could come as early as late summer with acute approval following in the fall. More info on my blog at Vestopia.

2008 Jun 29 07:52 PM

[Dan Weiss:]

See news today. Looks like company is to be acquired by Viropharma for a 40% premium (with additional potential kickers)

2008 Jul 15 01:01 PM