Acadia Pharmaceuticals Inc. President Serge Stankovic said the company was “kept completely in [the] dark” by the FDA regarding specifics about what the agency found wrong a month ago with the sNDA for Nuplazid (pimavanserin) – until, that is, the agency’s complete response letter (CRL) landed on the firm’s desk.

CEO Stephen Davis said San Diego-based Acadia “absolutely would have expected to learn of this earlier in the process. We didn’t. It’s very disappointing to us both on the substance and process level[s].”

The company will request a type A meeting within days, he said.

Shares of the company (NASDAQ:ACAD) fell 17%, or $4.41, to close at $21.18 as Wall Street learned of the CRL. The sought label expansion would allow use of the drug to treat hallucinations and delusions associated with dementia-related psychosis (DRP). Acadia said that, despite agreements with the agency’s psychiatry division regarding the design of the pivotal phase III Harmony study – which targeted a broad patient population analyzed as one entity – the division cited as the reasons for the CRL a lack of statistical significance in some of the subgroups of dementia, plus insufficient numbers of patients with certain less common dementia subtypes. Regulators also said that they consider a phase II Alzheimer’s disease (AD) psychosis study, a supportive experiment, to not be adequate and well controlled. Nuplazid was first approved in April 2016 for Parkinson’s disease psychosis (PDP).

After hearing from the agency in early March about unspecified lacks in the sNDA, which bore a PDUFA date of April 3, “we did escalate within the FDA and never received any additional information regarding the nature of the deficiencies,” Davis told investors during a conference call, adding that “how much exposure this application has had at higher levels” is unknown. He said Acadia was “very surprised” by the concerns raised in the CRL. “Our very strong position today is [that] the FDA got it right the first time at our end-of-phase II meeting, and they should stand by that position,” he said, conceding that a “multitude of scenarios” could unfold, including the need for new trials.

‘Multiyear’ delay prospect

Stankovic said the FDA in the CRL is asking “a completely different question that would require a different program that obviously we did not run,” and Acadia at the type A meeting intends to “remind the FDA about not only agreements, but rationale and scientific arguments” behind the research conducted so far. “We will not be bringing into the type A program, as an initial position, any [plan for] new studies,” he said, noting that the CRL doesn’t ask for them outright, either. “All of the information and questions that are raised in the CRL were clearly available for their review even at the very early, pre-sNDA stage,” he added. Nuplazid seems to work by way of a combination of inverse agonist and antagonist activity at the serotonin 2A and 5-HT2C receptors, without binding to dopamine, histamine, muscarinic or adrenergic receptors.

Mizuho analyst Vamil Divan said in a report that, given the notice of sNDA deficiencies, the CRL was expected but “details appear worse than some had hoped.” The deficiencies notice arrived March 3; Acadia disclosed it five days later. CEO Davis said during a conference call at the time that company officials “immediately and repeatedly have been pushing the FDA. We just don't have any feedback from them yet. They've told us twice that they don't have any additional questions for us, and that's where things stand at the moment.” The requests, he said, “were not related to any new data. They were more a clarification related to particular patient profiles that FDA asked us to provide.” During the latest call, Davis said it’s “a little bit premature to talk about the implications of this,” and the sit-down with regulators in a month or so should allow Acadia to say more. “Certainly there are examples of companies that go through the type A meeting, [and] the appeals process, and get decisions reversed,” he said.

J.P. Morgan analyst Cory Kasimov said in his report that the data regulators want from the phase III Harmony trial involve “factors that the design of the study was never powered to demonstrate. We await visibility on whether the CRL will result in a multi-month or multi-year delay to re-assess the mid- to long-term outlook for Nuplazid,” he wrote, adding that he believes DRP “is ultimately an approvable indication.”

CEO Davis pointed to a similar opinion switcheroo in the FDA’s complaint about the AD trial. “Given the number of patients we had, which of course was a reflection of having stopped the study at the interim [readout], we think the data is quite supportive of efficacy,” he said. “The study was certainly not powered to show that, and certainly not powered based on the number of patients you would have on stopping at the interim analysis – which, again, was agreed [upon by the] FDA. We’ve done some calculations to determine what would have been required, and we would have needed to have almost double the number of patients for that to be statistically significant.” As they stand, the results are “quite impressive,” he said.

Up for debate is what the Acadia situation might mean for the likes of Boston-based Karuna Therapeutics Inc., with its KarXT DRP program in an ongoing phase Ib study in healthy elderly volunteers – potentially “an advantageous position to leverage any learnings from Acadia’s setbacks for a more pointed post-phase Ib discussion with the FDA” about the way forward, RBC analyst Brian Abrahams said in a report. “Our sense is [that] Karuna may consider initially focusing solely on the AD psychosis population, which represents 70% of the broader dementia population, though we believe the [company] could also explore PDP as well, given the regulatory precedence already set by [Nuplazid],” he wrote.