This past week, Spark Therapeutics (ONCE) had a highly positive adcom panel meeting for its drug Luxturna (voretigene neparvovec). This is a one-time treatment given to patients with an inherited retinal disease (IRD). More specifically, the condition is called biallelic RPE65-mediated inherited retinal dystrophy. It affects around 3,500 patients in the U.S. and Europe. In my opinion, the positive panel vote gives a high likelihood that Luxturna will be approved by the FDA. The FDA decision is expected to be made on Jan 12, 2018 which is the Prescription Drug Fee User Act (PDUFA) date.
Adcom Advisory Panel
The advisory panel highly recommended that Luxturna should be approved by the FDA. The vote was 16 for recommendation of approval versus 0 against. Not only was the vote a beat, but it was a unanimous beat. This gives a very high chance that Luxturna will be approved by the FDA early in 2018. Can the FDA go against the advisory panel? The FDA can go against the FDA advisory panel if it wants to and decide to approve Luxturna. Considering that the vote was unanimous in favor of approval I don't see that happening. Maybe if the vote was mixed say for example it was 9 for approval and 7 against. In that instance, the FDA might think differently. But with a 16 - 0 vote, I see approval as being just about guaranteed. The adcom panel vote was based on a positive phase 3 trial done by Spark Therapeutics.
Phase 3 Data
The phase 3 study recruited a total of 31 patients with biallelic RPE65-mediated inherited retinal dystrophy. At least 21 of the patients were put on Luxturna, while the other 10 patients received a placebo. The primary endpoint of the study was based on a test known as the mean bilateral multi-luminance mobility testing -- (MLMT). In essence, it was a test where patients walked through a maze with different light levels throughout. Tapes were recorded and then sent to independent graders. They basically either gave a pass or fail, depending upon the speed and accuracy with how subjects could navigate through the course. This was measured over a one year period. The trial met its primary endpoint in that the primary endpoint showed that the treated group improved in vision (navigating through the maze) better over the placebo group. This was done with statistical significance, with a p-value of p = 0.001. In my opinion, these results were impressive, especially for this patient population which greatly suffers from this rare retinal disease. Think of it this way, a majority of these patients eventually achieve complete blindness. There has been no treatment approved by the FDA to treat this rare disease. This was a crucial decision by the advisory panel to help get Luxturna to market. Now, it's all up to the FDA to decide. Considering that there have been no other approved treatments for IRD, along with a positive adcom panel vote, I'm inclined to believe that Luxturna will be approved by the FDA.
According to the 10-Q SEC filing, Spark Therapeutics has cash and cash equivalents of $238.6 million as of June 30, 2017. The company expects to be able to have enough cash to fund operations into 2019. That includes the commercial launch of Luxturna, should it receive FDA approval. Although, that is not a hard rule. If the company feels it is low on cash, it could potentially dilute either once approval hits, or sometime thereafter. It highly depends on how it plans to focus on its commercial launch in the United States of Luxturna.
One risk would be if the FDA decides that it doesn't want to approve Luxturna. Again, I don't think this will be a problem. The efficacy of the primary endpoint has been established, despite not passing on visual acuity as a secondary endpoint measure. A second risk is that it is too early to tell if insurance payers will cover the treatment. It is a one-time treatment, but it is expected to cost up to $1 million for one treatment for one patient that could last for a year. The long-term effect of Luxturna in patients with IRD has not been fully evaluated. As such, the uptake of Luxturna in the marketplace remains a huge unknown for now. Still, it should do fairly well considering there is no other FDA approved option for patients at the moment.
The positive panel recommendation pretty much guarantees, in my opinion, that Luxturna will be approved. The phase 3 efficacy data can't be disputed by the FDA much, in addition Luxturna was shown to be safe for patients to take. I would also like to note that given the positive panel recommendation from the Advisory panel from the U.S., there is a good chance for approval in another territory. That's because Spark Therapeutics is also seeking approval for Luxturna in Europe. It submitted an application to the EMA on July 31, 2017. That gives Spark another catalyst down the pipe that traders and investors can take advantage of as well.
This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical investment research service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to my Service, I'm currently offering a two-week free trial period for subscribers to take advantage of. Only the first 25 subscribers will get the lower legacy rate. If you want to secure your spot, please do so as soon as possible!
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