Arena Pharmaceuticals (NASDAQ:ARNA)
On Tuesday January 12, 2016 Arena Pharmaceuticals announced a collaboration with a privately held pharmaceuticals company, known as Boehringer Ingelheim — BI. This research collaboration is an early one targeting G-coupled protein receptors. These types of protein receptors go after several types of Central Nervous System — CNS — disorders. Arena is providing its research on these protein receptors, and both companies will work together to create targets against them for commercial purposes.
Under the terms of the agreement BI will have exclusive worldwide rights for these receptors. This means that any compound that is created automatically belongs to BI, and Arena won’t have any exclusivity with them. Such targets that both companies can go after in the CNS space are: Depression, Alzheimer’s and Schizophrenia. Individually each target indication has a large market opportunity, but in total there are approximately 450 million people suffering from mental health problems.
Even though Arena won’t have any exclusive rights to the compounds, that doesn’t mean the company goes home empty handed. On the contrary, Arena is expected to receive up to $262 million upfront pending a successful marketed product. In addition, Arena will be eligible to receive tiered royalties on all products created from the collaboration. This means that Arena still gets something out of this deal, therefore the company had made a good decision in this regard. Especially since management has failed to create shareholder value, and the share price has been suffering as a result of it.
Biomarin Pharmaceutical (NASDAQ:BMRN)
On Thursday January 14, 2016 Biomarin noted that the FDA rejected the NDA for their Duchenne Muscular Dystrophy — DMD — drug, known as Kyndrisa. Shares remained flat despite the rejection, probably because the company already has multiple FDA approved products on the market. What it comes down too is that the FDA wasn’t satisfied with the clinical evidence it had received. The FDA stated in the Complete Response Letter — CRL — that there was not enough evidence to prove that the drug was effective in improving patients with DMD.
With the CRL in hand, Biomarin must now choose the next steps with the FDA to determine how to gain approval for Kyndrisa. As mentioned before the company is not in desperate need for approval, as it is already making a lot of revenue on other products. A lot of the negativity on the FDA rejecting the drug had already been factored in for the most part anyways. This is because back in November of 2015, an FDA advisory panel concluded that the drug was not efficacious enough to approve in its current form.
The FDA doesn’t have to listen to an FDA advisory panel, but it typically does. It severely takes the decision of the advisory panel into consideration before rendering its verdict. Biomarin is not out of the fight quite yet, because it still has the ability to seek Kyndrisa approval in Europe. A European advisory committee is expected to announce its recommendation for approval by either April or May. A final decision would be expected from the European Medicines Agency — EMA — by the 3rd quarter of 2016.
Sarepta Therapeutics (NASDAQ:SRPT)
On Friday January 15, 2016 shares of Sarepta Therapeutics tumbled by 50% as a negative FDA internal report came out that critiqued the company’s DMD drug Eteplirsen. The negative review noted that the sample size of the patients in the study, twelve patients, was quite small. They also state that even though there are no FDA approved drugs that treat DMD, it will not base its decision based on this notion.
What that means is that Sarepta will not get a free ride to approval just because it targets a condition with no current therapy option. I expect this to be true, because the FDA only approves drugs based off two key items. These key items are: Safety of the drug, and efficacy of the drug. There is no doubt that Eteplirsen is safe, so it is okay in the regard. The problem is that the internal FDA reported noted problems with the amount of dystrophin levels being created.
A lot of analysts and investors were expecting at least 3% or higher in the production of dystropin levels. Instead, the company achieved somewhere around the 0.9% range. This negative review along with this new data from the review is probably what caused the share price of Sarepta to tumble. The company is expected to convene with the FDA advisory panel on January 22, 2016. Sarepta hopes that it can convince the advisory panel to recommend Eteplirsen for approval.
Even if by some small chance the FDA advisory panel recommends Eteplirsen for approval, it will be up to the FDA to determine whether or not to approve the drug. The FDA typically renders its verdict based upon the advisory panel’s decision, but it doesn’t have to. The FDA is expected to render its final decision for Eteplirsen by Feb 26, 2016. Hopefully DMD patients can get a treatment they desperately need, but do not believe that the FDA will approve the drug just because it targets an unmet medical need.
[Image Courtesy of Wikipedia]