Chelsea blindsided again on Northera plan; shares plunge
This article was originally published in Scrip
Investors' confidence in Chelsea Therapeutics' ability to read the US FDA is waning, with shares of the firm tumbling as low as 52% on 3 July after the agency for the second time in recent months expressed doubt about how the company is going about providing efficacy and safety data for Northera (droxidopa) – declaring the company's latest proposal insufficient, making the drug's path to approval much more complex.
Shares of the Charlotte, North Carolina-based company closed at 87 cents, a loss of 60 cents, or 40.7%.
Chelsea is seeking approval of Northera as a therapy to improve symptoms of neurogenic orthostatic hypotension (NOH), a chronic disorder caused by a deficient release of norepinephrine, which results in a sudden drop in blood pressure when a person goes from a supine position to standing, causing dizziness.
The firm received a complete response letter in March, despite winning the backing of the FDA's Cardiovascular and Renal Drugs Advisory Committee a month earlier (scripintelligence, 29 March 2012, 24 February 2012).
Chelsea revealed in May it was changing the primary endpoint of its ongoing study 306B, which the firm had intended to use to address the FDA's March complete response letter (CRL) for Northera (scripintelligence, 23 May 2012).
The revisions to study 306B were being done because the company said it initially had misread the FDA in the importance of certain issues in the CRL, but after subsequent discussions, Chelsea thought the modified endpoint would suffice.
In May, Chelsea said it would provide the FDA documentation verifying that all data related to patients currently enrolled in study 306B would remain appropriately blinded.
But in the FDA's latest feedback to the firm, it said because of the "theoretical" risk that certain patients from study 306B could have been unblinded, regulators could not be confident that information did not allow Chelsea to redesign the trial to work.
The FDA's "advice letter" noted that if an analysis of all patients enrolled in Chelsea's study 306 after the firm amended the analytic plan demonstrated a statistically significant benefit on the primary endpoint, the agency might regard it as a positive trial, the firm said.
But because the analytic approach appears to exclude at least 109 patients from study 306B, the FDA recommended Chelsea design and conduct a new trial to demonstrate Northera has a significant and persistent effect on symptoms of NOH, the company said.
Chelsea emphasized that regulators did not provide feedback or express any concerns about the firm's proposal to assess efficacy two-weeks post-titration using orthostatic hypotension symptom assessment (OHSA) item #1 score – dizziness, lightheadedness, feeling faint or like the person might black out – nor did the FDA provide further guidance about the duration of clinical efficacy data needed to support a "persistent effect."
But Chelsea said it was evaluating several scenarios that may provide the supportive data the FDA is seeking, while minimizing any delays to the planned resubmission of its Northera application.
"We are deeply disappointed that the agency did not find our blinding documentation sufficient to warrant full use of study 306B as confirmatory evidence of droxidopa's demonstrated benefits," Chelsea President and CEO Dr Simon Pedder said.
He said the FDA acknowledged the "important need" for a safe and effective therapy for NOH patients and indicated the agency was "anxious" to work with the firm in designing a new trial, "specifically noting that many suitable trial options exist, including potentially recruiting patients directly from Chelsea's expanded access program."
Having enrolled over 450 patients to date, Chelsea's clinical program in NOH, an orphan indication, represents the largest randomized controlled database ever assembled to assess patients with the condition, noted Dr William Schwieterman, chief medical officer at the company.
Dr Schwieterman contended that Northera not only has "consistently" been safe and well-tolerated in a frail and elderly population, but repeatedly demonstrated significant improvement across multiple, clinically relevant symptoms of NOH.
"This experience affords us unique insights into the challenges associated with conducting clinical trials in this small and diverse patient population," Dr Schwieterman said. "Applying both our experience and robust body of clinical evidence, we believe we can continue to demonstrate the efficacy of droxidopa and submit compelling data supporting our application for US marketing approval."
Deutsche Bank analyst Dr Robyn Karnauskas predicted three scenarios moving forward for Northera: Study 306B is halted now and if positive, Chelsea reinitiates conversation with FDA; study 306B is taken to completion, and if positive, the firm again pursues talks with US regulators; or the company stops 306B and initiates a new study using patients from its long-term extension study.
"Given FDA's feedback on study 306B, it appears that the most prudent approach would be to start a new study with remaining cash and a small equity raise," Dr Karnauskas said.
She said the two other scenarios assign "too much weight" to the FDA decision on a study it does not approve, and under those scenarios, cash burn would continue and it would be increasingly difficult to raise incremental cash if the agency did not approve Northera on study 306B.
Dr Karnauskas said that with the FDA's feedback now public, the European Medicines Agency may also stress similar issue about blinding of the trial.
"Hence, approval in EU seems difficult as well on Study 306B," Dr Karnauskas said.
While Dr Karnauskas said she continues to believe Northera provides a benefit in NOH, "this is not the most relevant question at this point."
"FDA and Chelsea appear to be on different pages on what the appropriate design of trial," she said.
While the FDA has requested a trial of two to three months in duration, Chelsea believes study 306B meets that criterion with patients on drug for 10 weeks, or 2.5 months.
"A trial on the higher-end or longer than three months would make us more comfortable," Dr Karnauskas said. "More so, other twists in regulatory plan keep arising. Until we see the two parties on same page, we remain on sidelines."
Roth Capital analyst Scott R Henry said his discussions with the firm indicate they believe that with strong 306B data, the FDA could change its mind.
Another scenario could be for the firm supplements the 306B trial or the 304 open-label study before filing, or initiates another new trial.
The company is expected to update its plans by early August, Mr Henry pointed out.
If approved, he anticipated a Northera launch to now occur in 2015, on the expectations of a one-year delay.