Cempra Inc (CEMP) Stock: Time Runs Out, FDA Rejects NDA

Cempra Inc (NASDAQ: CEMP)

Well, tick, tock went the clock for CEMP as CNA Finance covered yesterday, but unfortunately for CEMP, time appears to have run out on its solithromycin NDA.

On Thursday, CEMP said that they have received a complete response letter from the FDA regarding its NDA for solithromycin, a treatment for community-acquired bacterial pneumonia.

CEMP NDA Won’t Fly

As noted yesterday, the dark cloud that remained over the head of the NDA had to do with the risk of hepatoxicity, a concern that was raised by the FDA in a previous, but unbinding decision. However, the panel had recommended approval based on the benefits outweighing the risk of adverse reaction from the drug.

On Thursday, though, the FDA rejected that theory and concluded that the risk of hepatoxicity had not been adequately characterized, a term used in the prior opinion. Additionally, the FDA cited that there are additional issues related to CEMP’s manufacturing facility, which were not specified in the CEMP statement.

In further analysis, the FDA responded that the size of the safety database, which treated 920 patients, was too small to measure adverse effects and is recommending a study size almost ten time larger, requesting data from 9000 patients.

CEMP Going Forward

While the rejection of the NDA is a blow to CEMP, the company is still well funded with over $220 million dollars in cash and a pipeline that holds future potential. Solithromycin, which has patent protection through 2032, may not have seen its last days either, as the drug has shown potential in treating targeted conditions.

The rejection by the FDA demonstrates that, while the administration has been criticized of late for approving drugs that do not demonstrate a conclusive set of safety or efficacy data, they do remain stubborn in approving applications for drugs that have mixed sets of data.

Without a strong advocacy group behind an application, chances are further reduced. Although CEMP is getting knocked down in the market based on this release, its not necessarily time to write them off just yet.

Solithmorycin has shown promise, and with ample cash in the bank, shareholders may still have a couple of shots on goal in the coming months.

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