Encysive Pharmaceuticals Inc. lost almost half its stock value Monday on news that the FDA may require additional clinical trial work for the pulmonary arterial hypertension drug Thelin.
The company filed its new drug application in May. While the FDA did issue an approvable letter, the requirement of further information for final approval sent the company’s stock (NASDAQ:ENCY) into a nosedive. It tanked $4.48 Monday, or 49.3 percent, to close at $4.60.
"The Street hates uncertainty. Investors hate uncertainty. I hate uncertainty," said analyst Matt Kaplan of New York-based Punk Ziegel & Co. "We don’t have the answers, and the company says they don’t have the answers yet, either."
The Houston-based company said in a press release that the action letter addresses concerns and observations, including a request for additional clinical trial work, that must be satisfied before Thelin (sitaxsentan) can receive final approval. In a conference call, Encysive’s President and CEO Bruce Given said he is hopeful that the questions can be addressed without additional clinical trials, considering the company has a healthy database of more than 1,500 subjects. But he refused to go into specifics about the FDA’s concerns or to set a timeline as to when they might be resolved. The company plans to meet with the agency within the next 30 days to better understand what is needed.
"The reality of it is," Given said, "the FDA is a bit of a black box. You submit, you put your best foot forward, you respond to all of the questions you can, and then you basically wait to see where they come out on it."
Kaplan said his firm gave Thelin an 80 percent chance of receiving approval or an approvable letter with only minor changes, such as a labeling issue. But the letter seems to have fallen into that 20 percent "gray area," in which it sounds like the FDA wants more detail about any number of things.
"We could talk about it for an hour," Kaplan told BioWorld Today. "My sense, if you look at the data, it’s clear that the drug is efficacious. So the likelihood is the FDA is probably asking them something about safety or drug-to-drug interaction studies. They’ve got data with that."
The agency also could be requesting more data on a label claim that Thelin has a positive impact in time to clinical worsening. The company just reported data associated with that issue at the recent American College of Cardiology meeting.
Other analysts on the conference call brought up bleeding risk issues of Thelin and a recent labeling change to Tracleer - the only approved endothelin antagonist for PAH. But Given said the bleeding risk is well-characterized in the data, and that Encysive worked to provide a better data package for Thelin than was included in the Tracleer program, particularly in the area of patient safety. Still, he declined to characterize the FDA’s concerns as being related to safety, efficacy or anything else.
"We can spin as many scenarios as anybody would like," Given said, but the company intends to discuss the specifics "in a quiet, confidential manner" with the FDA until a path forward is determined.
Shares of Denver-based Myogen Inc. (NASDAQ:MYOG), which is developing a potential Thelin competitor, climbed $1.38 on the Encysive news, to close Monday at $36.36. Top-line data of ambrisentan disclosed in December showed the drug improved patients’ exercise capacity, as well as a key secondary endpoint of time to clinical worsening. (See BioWorld Today, Dec. 13, 2005.)
But Kaplan said Myogen still is waiting for data from a second Phase III trial and has not filed for approval. The data package for ambrisentan is expected to include about 500 patients, far fewer than the 900 patients included in the Thelin package. And Myogen will face the same approval process as Encysive has for Thelin.
"I think this is kind of an indication that even with an SPA and a large database, you can’t take the approval process for granted," Kaplan said.
Encysive’s NDA for Thelin included data from two randomized, placebo-controlled Phase III studies, STRIDE-1 and STRIDE-2. Data from the first 12-week trial showed Thelin produced a robust increase in six-minute walk distance of 65 meters (p=0.0002) vs. 34 meters (p=0.0005) in the intent-to-treat patient group.
In STRIDE-2, Thelin met its primary objective of improved six-minute walk with a statistically significant increase of 31.4 meters compared to placebo (p=0.03). The 18-week study, conducted under a special protocol assessment, also showed that Thelin was safer than the approved oral therapy Tracleer (bosentan, from Actelion Ltd.) The 100-mg dose of Thelin produced a 3 percent rate of liver function abnormality, compared to 6 percent for placebo and 11 percent for Tracleer. (See BioWorld Today, Feb. 15, 2005.)
Thelin also appeared to interact better with sildenafil (Viagra, from Pfizer Inc.), a PDE5 inhibitor also used to treat PAH, and Encysive could provide the FDA with more data in that respect through its ongoing STRIDE-3 trial. Other therapies for the condition include the prostacyclins Remodulin (treprostinil sodium, from United Therapeutics Corp.) and the inhaled Ventavis (iloprost, from CoTherix Inc.)
Encysive owns worldwide rights to Thelin and already has hired a 52-person sales force to market the product. Given said the approvable letter now gives the representatives a little more time to prepare and become familiar with their territories before marketing to customers.
Expecting a product launch this year for Thelin, Kaplan had modeled sales of $21.6 million in 2006, $129.7 million in 2007, $278 million in 2008 and $367 million in 2009. He believes Thelin will eventually be approved.
"I don’t think this is the death now for the company," he said. "It’s recoverable, and I think they’e got a product there. Obviously, the biggest issue is, How much time is it going to take them to answer and address these questions?’"