The FDA refusal to approve a new drug application for Recro Pharma Inc.'s lead non-opioid pain candidate, I.V. meloxicam, sent company shares (NASDAQ:REPH) plunging 54.7 percent lower to close at $5.36 on Thursday, amid what had been a flurry of precommercial preparations at the Malvern, Pa.-based company.

In a complete response letter, the agency questioned the drug's analgesic effect and raised questions regarding data on extractable and leachable compounds provided in the application. Recro President and CEO Gerri Henwood said she was "extremely disappointed" and that the company intends to request a meeting with the agency as soon as possible.

Recro, which sought FDA approval to market I.V. meloxicam for the treatment of moderate to severe acute postoperative pain, had expected the drug to launch later this year, hoping to position it as a valuable analgesic alternative in the face of what John Harlow, the firm's executive vice president of commercial, called the "increasing urgency of the national opioid crisis," during a first-quarter earnings call earlier this month. Market evaluations, customer segmentation and launch tactics were largely addressed over the past 12 months, he said, positioning the company to launch with more than 50 sales representatives, with an expectation to double to 100 reps over the next six months following approval.

Breaking that stride, however, is the complete response letter (CRL) the company said states that "data from ad hoc analyses and selective secondary endpoints suggest that the analgesic effect does not meet the expectations of the FDA" and "raised CMC-related questions on extractable and leachable data provided in the NDA."

"I don't know exactly what FDA means in terms of what further expectations they would have," Henwood said during a company conference call held Thursday to discuss the news. "We have endeavored to follow FDA's feedback and guidance, and to do our level best to meet their expectations."

Piper Jaffray senior research analyst David Amsellem called the FDA's concerns "cryptic and baffling," given that I.V. meloxicam demonstrated superiority to placebo on primary and secondary endpoints in two large phase III studies. "Is this a case of the FDA shifting the goalposts on REPH in terms of study design and endpoints? We simply do not yet know," he wrote.

The NDA for the 30-mg dose of the drug was supported by positive results from two pivotal phase III trials in patients following bunionectomy and abdominoplasty surgeries, a large double-blind phase III safety trial and four phase II trials for the management of moderate to severe postoperative pain, among others.

In the first phase III efficacy study, I.V. meloxicam 30 mg met the primary endpoint of a statistically significant difference in Summed Pain Intensity Difference (SPID) over the first 48 hours vs. placebo in patients following bunionectomy. In the second phase III efficacy study, the same dose of I.V. meloxicam achieved the primary endpoint of a statistically significant difference in SPID over the first 24 hours vs. placebo in patients following abdominoplasty surgery.

Recro purchased global rights to develop I.V. meloxicam, a long-acting preferential COX-2 inhibitor, from Alkermes plc in April 2015, while at the same time acquiring a now-profitable manufacturing business.

Developed and launched by Boehringer Ingelheim International GmbH, oral meloxicam was first launched in South Africa in 1996 for the treatment of osteoarthritis and rheumatoid arthritis, according to Cortellis Competitive Intelligence.

Henwood said she could speculate neither on whether the CRL was due to a dosing issue nor whether it could be resolved with existing data or would require a new trial. Following a meeting with the FDA "we'll know better" and will be "more forthcoming," she said.

In the wake of the CRL, Henwood said the company, "a pretty prudent and cautious group," was actively evaluating options around what comes next, looking at areas where it may need to take near-term action. "As we get a better idea of the feedback from the FDA and what the implications of that are, I think we'll be able to come back and provide a little bit more color, and have a clear plan," she said.

Post-CRL meetings, which can be requested within 30 days of receipt of the FDA's letter are typically scheduled within 30 calendar days from the agency's receipt of the meeting request. Official minutes of the meeting can take up to a month longer to be delivered to the sponsor.

Understanding the agency's questions around "extractable and leachable data" will also take some time. An FDA presentation from 2011 defines extractables as "compounds that can be extracted from the container closure system when in the presence of a solvent," and leachables as "compounds that leach into the drug product formulation from the container closure as a result of direct contact with the formulation."

Recro's meloxicam is manufactured exclusively by Alkermes, and Henwood said that "to the best of our knowledge" inspections at the two facilities involved in the drug's manufacture went smoothly and without issuance of any Forms 483. "It appears this area of question may be around additional data or, perhaps interpretation of existing data that the agency has," she said.

As of March 31, Recro had $51.3 million in the bank. The company's other pipeline candidates include Dex-IN, under development for the treatment of postoperative pain; Dex-SL, a product candidate for the treatment of chronic pain; and fadolmidine, for pain associated with surgery or certain types of chronic pain.

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