With a clear lead in the race to treat peanut allergies in children, DBV Technologies Inc. blinked.
DBV, of Bagneux, France, disclosed after Wednesday's market close that it had voluntarily withdrawn the biologics license application (BLA) for its Viaskin peanut allergy vaccine candidate in children 4 to 11 years of age following verbal and written communications with the FDA a day earlier about the filing. In a hastily scheduled conference call, newly named CEO Daniel Tassé said that, following feedback from the agency, DBV concluded the BLA, submitted Oct. 18, lacked sufficient detail regarding data on manufacturing procedures and quality controls. The FDA did not cite concerns related to the clinical module of the BLA for Viaskin Peanut, he said, "and we believe that the additional information needed to support this filing is available with a need for further clinical studies."
Tassé acknowledged that "obviously, I cannot speak to the precise timeline by which we'll address those questions with the FDA" but said the company will work closely with the agency to provide "an updated and complete file" as quickly as possible.
In the meantime, ongoing studies of the FDA breakthrough therapy- and fast track-designated peanut allergy candidate will continue as planned, he maintained.
Despite the company's emphasis on manufacturing data – "these are CMC issues that often happen in this process that I've seen before," Tassé said – investors clearly had a déjà vu moment, remembering late last year when the Viaskin peanut allergy therapy failed to reach statistical significance in a pivotal phase III trial in children.
The Pepites trial randomized 356 participants between 4 and 11 years in a 2:1 ratio to a daily 250-mcg dose of DBV's Viaskin peanut over 12 months, delivered through an epicutaneous patch, or placebo. With a primary endpoint of percentage of treatment responders, 35.3 percent of those in the treatment arm responded to therapy compared with 13.6 percent of those in the control arm who responded.
"The lower bound of the [95 percent] confidence interval did not reach the 15 percent criterion that was in the finalized statistical analysis plan that was submitted to the FDA," DBV's chief scientific officer, Hugh Sampson, said at the time. "This confidence interval requirement is quite stringent for a trial of Pepites' size." (See BioWorld, Oct. 24, 2017.)
Despite raised eyebrows from analysts, DBV also said that, given an efficacy signal and on the advice of the FDA, it would continue to plan for the BLA filing.
Many investors voted with their feet, however, exiting the stock in large volumes following the phase III miss. Reaction to the BLA withdrawal was much the same. On the Nasdaq, DBV's American depositary shares (NASDAQ:DBVT) hit an all-time low of $4.17 Thursday before closing at $5.76 for a loss of $8.39, or 59.3 percent. Volume of 1.6 million shares was more than 166 times the stock's three-month moving average. Shares fared no better on the Euronext exchange in Paris (PARIS:DBV), closing at €7.71 (US$8.84) for a loss of €17.81, or 69.8 percent.
Tassé, a 30-year biopharma veteran, was tapped last month to helm DBV following the retirement of co-founder Pierre-Henri Benhamou, who remains the company's non-executive chair. Tassé acknowledged that he didn't have details to share, in part, due to his three-week tenure on the job. But he refuted suggestions that the entire BLA was in jeopardy.
"We've had one day to look at this here," Tassé said. "I need to dive into it, make sure that the questions are well understood. We have the right expertise to answer it."
With Viaskin the first peanut allergy candidate to advance to pre-registration, "part of my role in joining the company was to manage that [commercialization] turn," he added. "I want to make sure that I understand every dimension of what's being asked by the agency before I make any commitments here."
DBV enjoys "a great relationship" with the FDA, according to Tassé.
"They've been most constructive in all of our exchanges with them over the years on both clinical as well as manufacturing issues," he said. "They were kind enough to sit down with us and give us a head's up to questions they wanted answered. It struck me as being the right thing to do to take that offer."
'More questions than answers'
Analysts, though, were caught flat-footed. Despite the undeniable market opportunity, "this action is likely to further dent investor confidence, which is already very fragile after highly confounded clinical results were reported," Leerink Partners LLC's Joseph Schwartz wrote in a company update, lowering the company's price target to $40 from $49 but maintaining an Outperform rating.
"The exact reasons why DBVT withdrew their biologics license application to address the FDA's concerns about manufacturing procedures and quality control are unclear, but importantly the FDA is not questioning clinical data at this time," he added. "It appears that we can rule [out] a worst case scenario in our view based on DBVT's commentary – there do not seem to be inherent problems with their electrospray technology."
Still, Schwartz projected a one-year delay, to 2021, in launching Viaskin Peanut, "which may be conservative but is based on a lack of visibility," he wrote.
Jefferies Group LLC analyst Eun Yang was more pessimistic.
"Aside from unexpected withdrawal of the Viaskin Peanut (VP) application from the FDA, DBVT's lack of details about next steps to address VP manufacturing issues raised by FDA and unclear timing for resubmission are not assuring," she wrote. Based on "increased regulatory uncertainty/risks, potential commercial disadvantage (vs. competitor) on delayed market entry if approved and likely additional capital needs at depressed share price in 2019," she downgraded the stock to hold from buy and lowered its price target to $8 from $37.
Striking a more measured response was H.C. Wainwright's Andrew Fein, who conceded disappointment in the BLA's withdrawal – a move that created "more questions than answers," he said – but maintained his belief "in the overall value, safety and efficacy of this program. As discussed by management, all members of the FDA review committee were present and the only questions or concerns presented revolved around the CMC process for the Viaskin patch," he wrote. "The agency did not raise concerns regarding clinical safety or efficacy outcomes. Thus, we maintain our belief in the eventual approval of Viaskin peanut despite a now uncertain delay."
On that final note, Fein retained a buy rating on the stock but slashed the price target in half, to $25.
Investors in competitor Aimmune Therapeutics Inc., meanwhile, jumped on DBV's setback. With a BLA filing expected by year-end on peanut allergy candidate AR-101, shares (NASDAQ:AIMT) of the Brisbane, Calif.-based company rose $3.36, or 15.5 percent, to close at $25.07.
Piper Jaffray analyst Chris Raymond jumped in, too.
"We didn't see that one coming," he crowed in a hot comment after writing a day earlier that confirmation of DBV's BLA submission was expected by Friday, with little chance of a refuse-to-file letter. A voluntary BLA withdrawal by the company wasn't even on Raymond's radar screen but suddenly positioned Aimmune for first-mover advantage in the space.
"In AR101's pre-BLA meeting, AIMT management indicates that extensive discussions on CMC took place with FDA, with the company coming away confident in the AR101 filing, which remains on track for YE18," he wrote. "This, coupled with the lack of clarity provided by DBV on the actual scope of CMC concerns, which could span from problems with manufacturing scale-up to issues with its proprietary electrospray patch technology to a whole spectrum of other concerns, indicates to us that this is a Viaskin Peanut-specific problem."
In February, Aimmune reported that AR-101, also with FDA breakthrough therapy and fast track designations, met the primary endpoints in its 499-participant pivotal phase III trial. About 67 percent of evaluable people treated with AR-101 tolerated a single highest dose of at least 600 mg of peanut protein with no more than mild symptoms vs. 4 percent of those given a placebo. (See BioWorld, Feb. 21, 2018.)
One-fifth of patients enrolled in the AR-101 arm of the PALISADE (Peanut ALlergy oral Immunotherapy Study of AR-101 for DEsensitization in children and adults) trial discontinued treatment – some over treatment-related adverse events (AEs) and others for reasons unrelated to AEs – Aimmune's chief medical officer, Dan Adelman, said at the time, but that rate was in line with other studies conducted by academic medical centers, he noted. For those able to stick with the treatment, the rewards were high: More than 96 percent of AR-101 completers tolerated a single highest dose of at least 300 mg of peanut protein during an exit double-blind, placebo-controlled food challenge, the company said. More than 84 percent tolerated at least 600 mg of peanut protein, and more than 63 percent tolerated 1,000 mg. Furthermore, AR-101 significantly reduced symptom severity at each dose level, compared to placebo.
DBV's regulatory snag increased clarity around the landscape of what's expected to be a blockbuster indication, according to Raymond.
"Although DBV is digesting FDA's requests with the intent of a resubmission, insights into the path forward will not be disclosed until Q119," he wrote. "In that this creates a further delay to an approval decision that may end up going through a standard review time, we see this as a further advantage for AIMT's potential 2H19 AR-101 launch."