What the FDA's complete response letter (CRL) for Mycapssa (octreotide capsules) to treat adult patients with acromegaly might mean for the ongoing European study remained unclear, as Chiasma Inc. is "revisiting all priorities" and preparing for a post-review meeting with U.S. regulators, said CEO Mark Leuchtenberger. "The FDA decision was a surprise and a profound disappointment to all of us here at Chiasma, and we respectfully disagree with it," he added.

Shares of Waltham, Mass.-based Chiasma (NASDAQ:CHMA) plunged 63 percent, or $6.42, closing at $3.75 Monday, as investors learned that the FDA wants another trial to overcome problems identified with Chiasma's single-arm, 155-patient, open-label phase III trial, submitted in support of the new drug application (NDA) for Mycapssa, designed to replace painful monthly injections of the somatostatin analogue.

The CRL received Friday by Chiasma strongly recommends that the company conduct a randomized, double-blind, controlled trial that enrolls patients from the U.S. and lasts long enough to ensure that control of disease activity is stable at the time point selected for the primary efficacy assessment. Also, the FDA said that, during a recent site inspection, deficiencies were conveyed to the representative of one of Chiasma's suppliers that would need to be resolved before approval. No safety concerns turned up in the CRL.

Leuchtenberger noted in a conference call with investors that the FDA, at the end-of-phase-II meeting, seemed to bless the design of the phase III experiment, which went on to sign up patients previously controlled on monthly injections and found that their responses held when they were given Mycapssa, with a safety profile similar to the shots. "The FDA communicated that the overall plan for the proposed phase III study was acceptable," he said. "Of course, these acceptances by the FDA are not always binding."

In December 2014, Leuchtenberger recalled, the agency officials said that, "while the interpretability and sufficiency of the trial results would be a review issue" and although they "suggested that a single-arm study is not as informative as a controlled study," the FDA "said in response to our question that it had not identified an issue that would preclude us from filing an NDA." So the company did so, and the NDA was accepted for review in August 2015.

What's next? "First and foremost, we must ensure that we understand the FDA's position in full before we determine the appropriate path forward," he said.

Cowen and Co. analyst Ritu Baral asked if the CRL requested a head-to-head trial with injectables, and wanted to know if the European trial is put together in such a way to address the worries cited by U.S. gatekeepers. Leuchtenberger said those are "not things we're prepared to discuss now, because we really only have a summary set of recommendations from the FDA." The European trial, called Mpowered, has established "a number of clinical sites and enrolled multiple patients," with plans to sign up about 150 and a goal of showing noninferiority to injections, he said, but declined to be more specific.

TPE GOES TO TYPE A

Asked about the manufacturing hitch, Leuchtenberger said the company "didn't learn that there was a deficiency that was potentially related to our supplier, and thus related to our application, until we received the CRL on Friday. We plan to meet with the FDA and the supplier to discuss the deficiency that was identified and when it was identified." The firm will update investors when there's more to offer, he said. "We can't give you an estimate on the time for that [update]," he said, noting that the consultation with regulators is a type A meeting that requires Chiasma to assemble documents. After the session, the FDA has 30 days to respond.

Ending the first quarter with about $134 million in cash, cash equivalents and marketable securities, the company said earlier that the money was enough to fund commercial operations at least through mid-2017. But everything is being re-examined now, Leuchtenberger said.

After Basel, Switzerland-based Roche AG quietly ended its deal with Chiasma for oral octreotide in 2014, Chiasma decided to forge ahead without a partner. The pharma giant had gained worldwide commercialization rights in exchange for $65 million up front, with potential milestones of up to $530 million and tiered double-digit royalties on net sales. Roche backed out because of pipeline priorities and the regulatory pathway, which has turned out to be challenging. (See BioWorld Today, Feb. 20, 2013.)

Octreotide remains the standard of care for acromegaly. Injections of the drug, which reduces the production of growth hormone by binding to receptors on specialized cells in the pituitary gland, hurt because of the thickness of the substance and the large-gauge needles necessary for administration. Many patients have to take systemic painkillers before their shots. Often, they need chronic intramuscular or subcutaneous injections to maintain disease control.

Capsules are designed using the Chiasma's Transient Permeability Enhancer, or TPE, technology, which allows gastrointestinal absorption of the unmodified peptide into the bloodstream. The stomach tends to degrade protein drugs given by mouth. TPE protects the peptide and increases bioavailability.

Cowen's Baral, about a month ago, wrote in a research report that she "think[s] Chiasma's TPE-octreotide will become a key treatment option for acromegaly both in the U.S. and, later on, in the European Union." She expected the FDA to approve the drug in the middle of this year and guessed Mycapssa would "achieve general pricing parity to current branded somatostatin drugs, as well as about 25 percent peak U.S. market share, resulting in U.S. peak sales of about $322 million." The study in Europe likely will succeed, in her view and sales there could reach $215 million.

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