Cempra At A Lucrative Entry Point For Buying Ahead Of Advisory Committee Vote

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About: Cempra, Inc. (CEMP)
by: Clinically Sound Investor
Summary

Wall Street grossly overreacted to the FDA's briefing document, which they interpreted as being solid evidence that Cempra's lead product Solithera would not be approved by year's end.

Another fear is that an expensive safety trial may be needed for the new macrolide antibiotic. At worst, this study may be required before Solithera is allowed on the market.

Finally, the Committee may impose restrictive label warnings that would destroy any profitability. Such happened to the last approved macrolide, Ketek, which went from the greatest launch to last resort.

However, the liver enzyme elevation associated with Solithera has been known for years. It also fills a dire medical need, to counteract bacteria that have become resistant to other macrolides.

It is much more likely that the panel will endorse Solithera with a reasonable label similar to that of current first line options in community-acquired bacterial pneumonia. Longs will prevail.

Yesterday, the Food and Drug Administration (FDA) released background information it prepared for the panel members of the Antimicrobial Drugs Advisory Committee who will be meeting on November 4 to discuss the new drug application (NDA) for Solithera (solithromycin), a macrolide antibiotic candidate from Cempra (NASDAQ:CEMP). The data mainly focused on SOLITAIRE-ORAL (S-ORAL, CE01-300) and SOLITAIRE-IV (S-IV, CE01-301), which were two Phase 3 randomized, double-blind, multi-center, multi-national, noninferiority trials comparing Solithera to moxifloxacin in community-acquired bacterial pneumonia (CABP) . The market reception to the briefing document was overwhelmingly negative; Cempra shares plunged over 60% mostly amid concerns on a rise in liver enzymes in Solithera patients. Enzyme elevation may be a potential sign of hepatotoxicity, which plagued the most recently approved macrolide, Ketek by Sanofi (NASDAQ:SNY). This article examines the new data and concludes that the panel will likewise weigh the evidence and still vote in favor of Solithera's approval.

FDA's Efficacy Summary and Conclusions (pages 25-26)

The study populations in the phase 3 trials were appropriate for non-inferiority assessment in CABP and included a relatively large proportion of subjects with no prior antibacterial therapy, microbiologically confirmed pneumonia, and high PORT scores. Randomization balanced the solithromycin and moxifloxacin groups on key baseline factors. In both trials, solithromycin demonstrated non-inferiority with respect to the pre-specified primary analyses of early clinical response, and response rates were numerically similar to moxifloxacin. There was a low degree of missing or indeterminate outcome data. Subgroup analyses of ECR supported efficacy. Solithromycin and moxifloxacin also had similar response rates in most analyses of secondary endpoints or other efficacy endpoints. Although solithromycin led to a numerical increase in rates of investigator-assessed clinical failure in intravenous-to-oral Study CE01-301 and data on subjects with baseline isolates that were macrolide-resistant were limited, the phase 3 trials provided evidence that oral and intravenous solithromycin are effective for the treatment of CABP.

What was the efficacy slip up? In S-IV, the failure rate at the short-term follow-up (SFU) visit (5-10 days after end of treatment, at Days 12-17) for Solithera (54/434, 12.4%) than moxifloxacin (35/429, 8.2%) was higher. The treatment difference of 4.3% actually hit nominal statistical significance (p = 0.05). When the FDA examined this potential signal for reduced efficacy in more detail, they remained perplexed: "The numerically higher rate of clinical failure could not be explained by worse symptomatic improvement at the SFU for solithromycin, because as shown in the above table [Table 8.6, page 24] numerical trends favored solithromycin [79.7% vs. 76.9%] in this trial for the pre-specified endpoint of symptom response at the SFU visit."

As cited in my opening coverage, what can explain the reduced efficacy is that the Intention-to-treat (NYSE:ITT) population includes 5 patients who discontinued due to insufficient supply of IV Solithera. These 5 patients were defined as failing treatment at SFU due to receipt of nonstudy antibiotics; omitting them brings the failure rate down to 11.4% (49/429) and out of statistical significant range. Cempra should remember to point this out. The agency went on to note that there was "no evidence that solithromycin was less efficacious in severe pneumonia (higher PORT scores), elderly, or patients with impaired renal function."

FDA's Evaluation of Safety Summary (page 26)

A significant safety signal for hepatotoxicity was observed in the solithromycin development program. The rates of transaminase elevations were higher in solithromycin- treated patients than those treated with moxifloxacin and were related to solithromycin exposure. The high rate of infusion site-related reactions associated with solithromycin (31.3%) as compared to moxifloxacin (5.2%) is another safety concern.

Rates of deaths and serious adverse events observed in the solithromycin and moxifloxacin arms were similar. The most common treatment-emergent adverse events in both treatment arms were diarrhea, nausea, vomiting, headache and dizziness. In 856 solithromycin-treated patients in the phase 3 trials, approximately 95% completed treatment. The incidence of study drug discontinuation was similar for solithromycin and placebo in the oral study, CE01-300. Higher rates of discontinuation in the solithromycin arm (4.9%) compared to moxifloxacin (3.7%) occurred in the IV-to-oral trial CE01-301, largely due to infusion site reactions.

FDA's Infusion-related Reactions Summary (page 34)

Infusion-related adverse reactions occurred in 31.3% of patients who received IV solithromycin compared with 5.2% of moxifloxacin recipients, and led to discontinuation of solithromycin in 10 patients (2.3%) [See Sections 9.4 and 9.7]. None of these reactions were life-threatening, but limited the ability to continue IV solithromycin. Administration of parenteral solithromycin through a central line was not evaluated in the clinical program.

Moxifloxacin has always been a milder drug to infuse. Even IV azithromycin, which was originally marketed in the U.S. by Pfizer (NYSE:PFE) as ZITHROMAX, is better tolerated at a 12% rate of infusion-related adverse effects ((AEs)); most common were injection site pain (6.5%) and local inflammation (3.1%). On the other hand, sometimes management is easier if AEs are predictable. There are several ways to mitigate AEs, e.g., by using a warm compress at the insertion site to promote widening of blood vessels and subsequent hemodilution. In patients in whom reactions are observed, the infusion rate might be decreased (infused longer than 60 minutes). Analgesics could be given to those with infusion site pain.

FDA's Hepatotoxicity Summary (page 34, paragraphs 1-2)

In the solithromycin development program to date, a range of patterns of liver injury associated with exposure to solithromycin were observed. There was a spectrum of both hepatocellular and cholestatic signatures of hepatotoxicity, in one case accompanied by eosinophilia and suggesting hypersensitivity as a mechanism for liver injury. These findings were noted among a relatively small number of patients treated with solithromycin for CABP (n=920), normal healthy volunteers exposed to the drug in PK studies, and a small number of patients administered solithromycin in studies of other conditions. We conclude that these findings comprise a genuine liver injury signal.

Despite the differences in chemical structure, the hepatic adverse effects seen with solithromycin during its development program exceed the pre-marketing hepatic signal seen with telithromycin.

It is unclear how the FDA can claim this. Yes, there was a signal. Even though transient asymptomatic serum elevations of liver aminotransferases ((ATs)) are part of the known macrolide AE profile, the overall incidence of alanine AT elevations was particularly high in Solithera patients and more so in S-IV (Table 1). This may have been due to the increased exposure to Solithera and the accumulation of the drug in cells from 3 factors: 1) the 7-day duration of treatment (compared to 5 days for S-ORAL), 2) the number of days beyond Day 1 using IV administration (this formulation is 100% bioavailable), and 3) an oral loading dose on the day of IV-oral switch. For the latter, the FDA simulated Solithera exposure with (800 mg, or 400 mg with renal impairment [CLcr < 30 mL/min]) and without a loading dose (400 mg, 200 mg renal dose), and based on the relationship they found between AUC and efficacy (Figure 4.2, page 10), felt that lowering exposure would not sacrifice efficacy, and recommended to just keep the usual oral daily dose of 400 mg.

Table 1. Alanine Aminotransferase Abnormalities at any Post-Baseline Visit

Degree of Elevation

SOLITAIRE-ORAL

n (%)

SOLITAIRE-IV

n (%)

Solithera N=412

Moxifloxacin N=423

Solithera N=418

Moxifloxacin N=415

> Upper Limit of Normal (ULN)

172 (41.7)

141 (33.3)

198 (47.4)

122 (29.4)

>3x ULN

22 (5.3)

15 (3.5)

38 (9.1)

15 (3.6)

>5x ULN

7 (1.7)

5 (1.2)

13 (3.1)

3 (0.7)

>10x ULN

1 (0.2)

2 (0.5)

0

0

>20x ULN

1 (0.2)

1 (0.2)

0

0

On the other hand, whereas all the hepatic-related cases potentially linked to Solithera by the agency's expert were of moderate severity at worst, in Ketek's original NDA, there were already 3 serious hepatic AE cases. In contrast, the probable Solithera-induced liver injuries numbered 13 (of which 3 he deemed as highly likely) from a safety database of 1,474 subjects. To quote the FDA Medical Officer's review of Ketek at the time, "Typically, in an NDA database of this size, one would only look for a "signal" of hepatotoxic potential. In this NDA safety database of 3265 telithromycin treated subjects, the case involving hepatitis with biopsy evidence of centrilobular necrosis with eosinophilic infiltration, appears to represent an "event" of a significant drug-induced hepatitis that quite possibly is associated with telithromycin. To observe even one serious adverse liver event of this nature thought to be associated with telithromycin in a safety population of this size is remarkable." [Scanned pages 3-4] His final recommendation was that, "Taking the risks and benefits of telithromycin based on the available data within the NDA into consideration, a satisfactory risk-benefit ratio for telithromycin is not supported." [Scanned page 55]

As a reminder that while Solithera may have its own problems, it is no Ketek. No Solithera patient in Phase 3 fulfilled Hy's Law criteria. Also, the highlighted cases in the briefing document occurred in non-CABP trials, which meant higher exposure. For instance, the chronic obstructive pulmonary disease trial used 600 mg daily for 28 days. Moreover, the nonalcoholic steatohepatitis trial extended for 13 weeks of treatment. What's important is that the enzyme abnormalities resolved either through adaptation or after drug discontinuation.

FDA's Hepatotoxicity Summary (page 34, paragraph 3)

The difference in peak ALT [alanine aminotransferase] values between the treatment groups in CABP trials should be considered in the context of the established moxifloxacin safety profile. The WARNINGS AND PRECAUTIONS Section in the moxifloxacin product labeling describes "Other Serious and Sometimes Fatal Adverse Reactions" that include "hepatitis; jaundice; acute hepatic necrosis or failure".

The public has a general phobia when it comes to product labeling, especially when they perceive an FDA threat to put items into the W&P Section, or even worse, a separate Black Box Warning. First, note that moxifloxacin has "three" BBWs: 1) ) tendinitis and tendon rupture, peripheral neuropathy, and central nervous system effects; 2) exacerbation of myasthenia gravis; and 3) serious adverse reactions such as QT Prolongation, hypersensitivity reactions, Clostridium difficile-associated diarrhea and a host of others including hepatotoxicity. Here is the corresponding W&P Section in oral ZITHROMAX's product labeling: "Hepatotoxicity: Severe, and sometimes fatal, hepatotoxicity has been reported, Discontinue ZITHROMAX immediately if signs and symptoms of hepatitis occur." These are the top two choices for CABP (and in all but the mildest cases, azithromycin has to be paired with a β-lactam agent such as amoxicillin-clavulanate). Therefore, hepatotoxicity label warning for Solithera is not a death knell; for practical purposes, it will just mean a more extensive consultation, as well as extra monitoring if an inpatient. Of course, what matters to investors is how the Committee will vote on Friday. With the input provided by the briefing document, the following is likely to occur.

Points for Advisory Committee Discussion

1. Has the Applicant provided substantial evidence of the efficacy of solithromycin for the treatment of community acquired bacterial pneumonia?

99%: If yes, please provide any recommendations concerning labeling.

  • In IV-to-oral, use the simpler regimen of 400 mg IV once daily; 400 mg PO (oral) once daily from the day of switch to Day 7. In patients with CLcr < 30 mL/min, 400 mg IV on Day 1 then 200 mg IV once daily; 200 mg PO once daily from the day of switch to Day 7.

1%: If no, what additional studies/analyses are needed?

  • Usually, some panel member with hidden financial ties to a competitor will try to sway the Committee against approval, but in this case, Solithera's rivals are generics. There should be no debate here, as the FDA already recognizes Solithera's overall efficacy.

2. Has the risk of hepatotoxicity with solithromycin been adequately characterized?

60%: If yes, please provide any recommendations for labeling

  • To reduce the risk for clinically significant hepatotoxicity, Solithera should NOT be used for longer than 7-days to treat CABP.
  • Limit use of the IV formulation to the smallest number of daily doses of treatment necessary to safely switch to the oral formulation.
  • Also, include the usual contraindication or warning against use of Solithera in individuals with a history of hypersensitivity and/or drug-induced liver injury associated with an earlier exposure to any macrolide or ketolide.
  • List as well as common drugs that are known or likely to alter Solithera metabolism or clearance, and vice versa. This would prevent cases like the death of a patient who after Solithera treatment took XARELTO (rivaroxaban), a Johnson and Johnson (NYSE:JNJ) anticoagulant drug whose metabolism may have been inhibited by Solithera, which led to anemia and death.

40%: If no, please discuss additional studies that are needed to further characterize the risk

  • Some people are just never satisfied with idiosyncratic etiologies. The dissenting side could possibly want a 5-day version of S-IV, but this is unnecessary due to efficacy at ECR. They can also just limit all 3 proposed regimens (Oral-only, IV-only, or IV-to-oral) to 5 days, but though this is logical, it is unlikely. A post-marketing liver outcomes safety trial requirement is probable. Such a study would be large (Ketek's enrolled 24,000) and could prove costly for Cempra (Sanofi paid $400 per patient back in 2001-02). Some ultra-conservative could demand a PRE-marketing safety study.

3. Do the risks of solithromycin, including hepatotoxicity outweigh the potential benefits in the treatment of CABP?

90%: If yes, please provide any recommendations for labeling

  • The labeling suggestions from Item 2 apply here as well.

10%: If no, what additional studies/analyses are needed?

  • Again, in this litigious country, some (including, arguably, the FDA itself) feel that one preventable death from unleashing a risky drug is worth more than thousands of preventable deaths from disease that same drug could've stopped.

The FDA expert concluded that if Solithera had a clinically substantial benefit over other currently approved treatments (such as in the treatment of CABP by organisms that are resistant to other macrolides), he would strongly push for above labeling recommendations in the 'yes' sections as part of a risk mitigation strategy. The bottom line here is that the need for a new and viable CABP option is too great and the Committee should vote to recommend that the FDA approve Solithera. For traders lucky enough to have bought yesterday, they could probably at least quadruple their investment in two days.

Disclosure: I am/we are long CEMP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.