Aimmune: FDA Panel Nod Pushes Peanut Allergy Treatment One Step Closer To Potential Approval

Sep. 25, 2019 4:11 PM ETAimmune Therapeutics, Inc. (AIMT)30 Comments

Summary

  • An FDA advisory panel recommended 7-2 that Palforzia should be approved for the treatment of peanut allergy.
  • The benefits of patients receiving Palforzia greatly outweigh the risks, especially since there have been so many accidental deaths that could have been prevented.
  • Palforzia gives minimal peanut exposure over time so that a patient can overcome an allergic reaction which is dangerous. However, the need to carry epinephrine on hand should counteract this issue.
  • Aimmune Therapeutics had $250.3 million in cash as of June 30, 2019, with enough cash to fund operations for at least the next 12 months and to get through two regulatory approvals which are the U.S. and Europe.
  • I do much more than just articles at Biotech Analysis Central: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

Aimmune Therapeutics (NASDAQ:AIMT) recently had an advisory panel convene to determine if its peanut allergy treatment Palforzia (AR101) should be recommended for approval. The final vote in terms of recommending possible approval of the drug was highly positive. The panel did back the safety of the drug; however, the label will have to include a black box warning. The thing is that this type of treatment, should it be approved by the FDA, will be a good way for patients to get over their peanut allergy. It is a large market opportunity in the billions, but the number one question is, will such a market be attainable? I believe so and this is based on the ability to reduce accidental deaths from peanut allergy.

FDA Panel Backs Peanut Allergy Treatment

The FDA advisory committee backed the peanut allergy treatment Palforzia from Aimmune with a positive vote of 7-2. Such a vote is not a total predictor in that the FDA will decide to approve the drug, but the advisory committee giving such a vote increases the odds. Then on top of that, the safety also got a good vote from panel of 8-1. This means Palforzia has a good shot at receiving FDA approval for reducing peanut allergy in patients ages 4-17 who have a confirmed diagnosis of peanut allergy.

The thing is that it all appears good, but there might be a problem that might pose a risk. This involves a REMS in place, which would be needed to reduce or prevent any issues arising from an allergic reaction when given treatment. It is likely that any patient given Palforzia must have a prescription for injectable epinephrine on hand. Why is this important? That's because treatment with Palforzia is incremental exposure to peanut protein. In that instance, an allergic reaction could occur when a patient is either given the first dose of treatment or slowly increasing dose levels. As you can imagine, this is a necessary REMS strategy in place.

The label will also include a black box warning. However, the black box label is not surprising given the nature of this type of treatment. Especially, since these patients who are allergic to peanuts are exposed to it gradually. There will be proponents who will try to shut down such a treatment. While it is risky, I believe the REMS strategy in place will handle any major issues from arising.

On top of that, I like to look at the game changing positive aspect of this treatment. This would possibly allow patients to reduce the potential for any severe allergic reaction for peanut exposure. Why is this important? Consider that while severe allergic reaction deaths are rare, they can happen accidentally. Even if minimal exposure to peanut protein can save one life, that would be a very important outcome. Such an aspect is the likely reason why the panel voted the way they did. They figured that treatment of Palforzia outweighed the risks.

Financials

According to the 10-Q SEC Filing, Aimmune Therapeutics has $250.3 million in cash, cash equivalents and investments as of June 30, 2019. The biotech is in good shape when it comes to its balance sheet. That's because it has stated it has enough cash on hand to fund the commercialization of both the U.S. and European approval. Not only that, but it will still even have cash left over to fund the other products being developed in the pipeline. That means the cash on hand is enough that the company can fund itself for at least the next 12 months without needing to raise additional capital.

Conclusion

The FDA panel seems to be on board with recommending treatment with Palforzia for peanut allergy. The risk is that even though the panel recommended the treatment for approval, doesn't mean it's guaranteed to be approved. That's because while the FDA takes its advisory panel's recommendation into account, it is not inclined to follow it. It could break away from its advisory panel and not approve the drug. However, I think there is a good chance for approval. Especially, when you consider that the treatment will likely carry a black box warning label talking about the risks of taking such a treatment. On the flip side, I provided evidence above about accidental deaths that can be avoided if a treatment like Palforzia is approved. I can understand the concerns of an allergic reaction while taking such a treatment, but with patients having epinephrine on hand at a moment's notice, this should squelch any of these concerns. If Palforzia is approved, it would be the first type of treatment specifically given the green light for marketing for peanut allergy.

This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of. My service offers a deep-dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.

This article was written by

Terry Chrisomalis profile picture
10.29K Followers
Actionable ideas on small-large cap biotech stocks through deep analysis.

I am the Founder of Biotech Analysis Central, A subscription service on Seeking Alpha's Marketplace. If you want to learn more about biotech investing or you want to check out my biotech analysis you can do so with a free 2-week trial to my service. Just hit the "Learn More" button on the bottom of the Marketplace Research Tab. I have a Bachelors of Applied Science Degree In Technology Management, Industrial and Business Services Management from St. Petersburg College Florida. I have been investing in biotech stocks for many years, and I prefer to invest as a long term investor. With that In mind I seek stocks that have long term value! I primarily Like to Invest In biotechnology stocks and I accept the risks. I Write for the Healthcare Sector and Stock market in general. I contribute to Seeking Alpha.

You can follow me on stocktwits.com under the name BiopharmaPro where I currently have (62.5K) followers. Join me in my quest to find the best biotechnology stocks that deliver results to help patients with new treatment options.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

Recommended For You

Comments (30)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.