Recro Pharma Inc. CEO Geraldine Henwood said the firm, in response to its appeal to the FDA on behalf of I.V. meloxicam for moderate to severe postoperative pain, got a “very lengthy letter” agreeing that safety and efficacy were sufficient for approval but “there was a need to negotiate labeling.”
Now that the firm has completed paperwork related to the spinout of Baudax Bio Inc. (Recro has become a contract development and manufacturing organization [CDMO]), Baudax is taking up efforts to put the non-opioid candidate on the market with an expected brand name of Anjeso.
The product has been the subject of two complete response letters (CRLs). The first came in May 2018, with the agency questioning the drug's analgesic effect and raising questions regarding data on extractable and leachable compounds provided in the application. Another arrived in March of this year, focused on the onset and duration of the drug, noting that the delayed onset fails to meet the prescriber expectations for I.V. drugs. The letter also cited regulatory concerns about the role of the compound as a monotherapy in acute pain, as well as how it would meet patient and prescriber needs in that setting.
Speaking earlier this month during the conference call on earnings, Henwood said that “we do need to refile with proposed labeling and the rest of the NDA goes with it,” plus a safety update, “which we would not anticipate to be problematic because the pattern seen in phase IIIb studies of adverse events, to all our beliefs right now, looks quite similar to what [was submitted] in the NDA.” She pointed out that “the annotation of where the support for those labeling statements could be found in the NDA.”
The company has “not really had labeling discussions with the division because of differences in their view of the entire filing,” Henwood said, and that job now falls to Baudax, as Recro sets about its strategy to drive growth and build on the strength and commercial success of its CDMO business. The firm said its 2019 year-to-date revenues of $82 million represent growth of 37% year over year, generating $4.8 million in cash from operations in the third quarter of 2019. Recro has raised its full-year revenue guidance to be in the range of $98 million to $100 million and is now guiding for its 2019 operating income to be the range of $40 million to $44 million. Piper Jaffray analyst David Amsellem in a Nov. 8 report called the CDMO business “stellar,” and was upbeat about the future. “We believe that visibility into sustainable earnings before interest, tax, depreciation and amortization from this business is high, particularly considering that Recro has multiyear agreements in place with top (and longtime) customers” including Teva Pharmaceuticals Industries Ltd., of Petah Tikva, Israel, and Novartis AG, of Basel, Switzerland, that will run through December 2024 and December 2023, respectively. The two customers accounted for 48% and 38% of CDMO revenue in 2018, respectively.
‘Worry-free I.V. NSAID’
Wall Street’s eyes have turned to I.V. meloxicam. Some – along with Recro – were puzzled by the reluctance to clear the product, given the data gathered by the company and the familiarity with oral meloxicam, which has available for almost 20 years. Talks are underway with the Office of Drug Evaluation (ODE) in the FDA. The division has been focused on the time of onset, “which is not as fast as opioid products,” Henwood said. “And at the end of dosing, that there is a chunk of patients who have a diminution of efficacy in [about] the last 20% to 25% of the dosing period. In some cases, we had thought that we had provided options that might have dealt with that before, but did not get feedback on them when the second CRL came out. I would expect there will be a submission and, hopefully, some dialogue around how we achieve what the division thinks is best and is clear for prescribers.” When such matters are cleared up, “based on what was in the letter and based on what our experts and regulatory counsel have told us that if we can successfully negotiate labeling with the division, that there would not be an advisory committee meeting,” she said.
Non-opioids already available include Exparel (bupivacaine liposome for injection, Pacira Biosciences Inc.) and Ofirmev (acetaminophen for injection, Mallinckrodt plc). They have chalked sales annually of around $400 million and $340 million, respectively. With an ongoing clamor for pain drugs outside of the troubled opioid class, though, Anjeso may find its place.
Piper Jaffray’s Amsellem, in a report last week, said he had “always found the CRLs baffling.” In the second one, the agency “remained hung up on the onset and duration of analgesic effect in the context of dosing once every 24 hours, and also noted concerns regarding the usage of the product as monotherapy,” which didn’t seem to make sense since the “reality [is] that a multimodal approach to postoperative pain management is essentially standard practice.” In the end, “Anjeso has all the makings of a high-margin product,” he said.
Baudax plans to launch with 40 to 50 reps at first, aimed at hospitals and ambulatory surgical centers (ASCs), and the sales team would peak as high as 100, able to target almost 1,400 hospitals and about 500 ASCs. The company is “taking a reasonable approach to pricing,” in his view, estimating a cost per day of $90 to $110. Assuming an average of two days of treatment per patient, the price tag translates into a cost per patient of around $180 to $220. Ofirmev goes for about $43 per vial, with dosing about every four to six hours. “Though the relatively cheap availability of the I.V. form of the nonsteroidal anti-inflammatory drug [NSAID] ketorolac is not lost on us, it is dosed every six hours (with a potential need for more opioid rescue) and Anjeso is armed with a strong body of safety data (e.g., no imbalance vs. placebo in terms of bleeding events),” he reminded investors. “Put another way, we see Anjeso as more of a worry-free I.V. NSAID option.”
Recro and Baudax began trading separately on Friday, with the former (NASDAQ:REPH) closing at $15.16, down 46 cents, and the latter (NASDAQ:BXRX) finishing at $4.51, down $1, or 18%.