Shares of Targanta Therapeutics Corp. plummeted 40 percent Tuesday after the Cambridge, Mass.-based firm said it received a complete response letter from the FDA asking for another study of oritavancin, an investigational antibiotic being developed for the treatment of complicated skin and skin structure infections (cSSSIs).
The company's stock (NASDAQ:TARG) closed at $1.34, down 91 cents.
While the FDA's decision was no surprise to Wall Street analysts, given the thumbs down last month on oritavancin from the agency's panel of outside advisers, Targanta officials appeared astonished by the complete response letter. (See BioWorld Today, Nov. 21, 2008.) "While we knew a complete response vs. an outright approval was a possibility, based on the FDA Anti-Infective Drugs Advisory Committee panel discussion in November, this complete response is markedly different from what we expected from the FDA," declared Targanta CEO Mark Leuchtenberger.
The FDA's briefing documents and the presentation made by agency drug reviewers at the Nov. 19 meeting "appeared supportive of oritavancin and presented a path for approval with study ARRI as a robust pivotal study supported by study ARRD," he told investors and analysts Tuesday during a conference call. (See BioWorld Today, Nov. 18, 2008.)
However, Leuchtenberger said, based on the complete response letter, which the company received late Monday night, "it appears that the FDA has backed away from this supportive stance and has raised concerns that were not expressed prior to the advisory committee meeting."
The FDA told Targanta that its Phase III ARRI trial, which met a 10 percent noninferiority margin, provided evidence of the activity of oritavancin. However, ARRI failed to provide substantial evidence alone or in combination with data from the company's other Phase III trial, known as ARRD, to support the safety and efficacy of oritavancin, a semisynthetic product of chloroeremomycin. ARRD, however, did not meet the 10 percent margin.
ARRD was initiated in 1998 by Indianapolis-based Eli Lilly and Co. - the owner of the rights to oritavancin at that time - and was designed with a 15 percent noninferiority margin based on previous FDA guidance. Regulators had agreed in 2001 to allow Lilly to complete ARRD as planned using the 15 percent margin but asked the firm to power ARRI to meet the 10 percent margin with an understanding that the strength of the results from ARRD would not be judged solely on the lower limit but also on the point estimate of the confidence interval and the safety profile with respect to the comparator.
But according to the complete response letter, the FDA determined that ARRD did not provide sufficient evidence of activity in cSSSIs because the 95 percent confidence interval between oritavancin and the comparator drug, vancomycin, was not less than 10 percent, Leuchtenberger said.
The FDA also mentioned that in ARRI, oritavancin did not appear to perform well in patients with methicillin-resistant Staphylococcus aureus (MRSA), and in ARRD, the number of patients with MRSA was insufficient to address the performance of oritavancin in treating those patients, he added. Further, Leuchtenberger said, the FDA cited other findings from the two pivotal trials that raised questions about the efficacy and safety of oritavancin for cSSSIs within the limited data available.
Those findings included the higher rate of study discontinuations for lack of efficacy among oritavancin-treated patients; the greater number of oritavancin-treated patients who died or had serious events of sepsis, septic shock and related events; and more oritavancin-treated subjects who experienced an adverse event of osteomyelitis and other sepsis, he noted.
None of those safety issues had been raised in the FDA's briefing document or in any of Targanta's discussions with the FDA, Leuchtenberger maintained. "There was a variety of statements made by the FDA that led us to believe that, in addition to the briefing documents, they were supportive of the approval with the data that we presented to them," he asserted. But, Leuchtenberger said, given the advisory committee's "mixed vote" last month, "we were still hopeful" the FDA would retain its supportive position of the drug. "However, clearly they haven't," he lamented.
The FDA advisers voted 10 to 8 that Targanta's data failed to demonstrate that oritavancin was safe and effective in treating cSSSIs. While the committee voted 11 to 6, with one abstention, that Targanta's Phase III ARRI study demonstrated the effectiveness of oritavancin, panelists voted 10 to 8 that the firm's ARRD trial did not.
Leuchtenberger said that if he were to speculate why the FDA issued a complete response rather than an approval, "it might be that it was maybe a close call, and once the call went against us, some of these requests for additional safety came along for the ride because the trial decision has already been made." Nonetheless, he said, the bottom line is that before oritavancin's application can be approved, it will be necessary for Targanta to conduct another Phase III study in patients with cSSSIs.
Leuchtenberger noted that the FDA said the study must include a "significant proportion" of MRSA patients.
Regulators also requested that the new study evaluate the effect of oritavancin on macrophage function and monitor for the potential for subsequent infections that could possibly be related to macrophage dysfunction due to the drug's long terminal half-life, Leuchtenberger said. He said it was the company's "understanding" that it could accomplish those tasks within a single additional Phase III study without the FDA requiring another separate safety trial.
Thomas Parr, Targanta's chief scientific officer, told investors and analysts that he was unaware of any instances where the FDA asked a firm developing antibiotics targeting Gram-positive pathogens to evaluate the effect of their drugs on macrophage function.
Leuchtenberger said Targanta plans to consult with the FDA and the company's board of directors, and "together decide how best to proceed." As for the company's finances moving forward, he said Targanta had "always stated that we were planning on raising money regardless of the outcome" for oritavancin's marketing application. As of Sept. 30, Targanta had cash, cash equivalents and short-term investments totaling $42.6 million.
Analysts estimated that the new trial requested by the FDA could cost Targanta as much as $40 million to complete. "Add to that a shortened patent life and an increasingly competitive landscape because of the delay, and a path forward becomes very unclear," said analyst Michael Aberman, of Credit Suisse Securities. Targanta's "best chance" to get oritavancin to the market, Aberman said in a research note, is to find a corporate partner for the drug.