FDA Whiplashes This Biotech
The Food and Drug Administration is making me dizzy whiplashing Chelsea Therapeutics all over the place. Perhaps I'll be able to take Northera for the dizziness someday.
Last March, the FDA rejected Northera, its drug for treating neurogenic orthostatic hypotension, a disease characterized by a sudden decrease in blood pressure when standing that can cause lightheadedness and even fainting. But there was a possibility that the company's ongoing trial, dubbed 306B, could satisfy the FDA's concerns.
The 306B trial was positive, but the FDA said it wasn't sufficient for approval. Chelsea was stuck running another longer trial.
Except, now Chelsea says that the FDA tells the company the 306B trial might be sufficient for approving the drug as a short-term treatment. Chelsea would likely have to run a longer trial after approval to confirm that the drug has a long-term effect without any major safety issues if used for an extended period.
Normally, I'd recommend taking the FDA changing its mind with a grain of salt. Cell Therapeutics made that claim about its non-Hodgkins lymphoma treatment Pixuvri, but the drug's U.S. prospects seem to be going nowhere fast. The approval of Gilead Sciences' Cayston is one of the only times I know of that the FDA reversed its initial decision.
The difference for Chelsea is that it has additional data beyond what it submitted originally. Cell Therapeutics and Gilead resubmitted without any new data.
It's curious that the FDA said the data from the 306B trial wasn't sufficient and then that it might be. Investors need to be careful because there's a fine line between the FDA saying "please submit the data, we think it'll make the drug approvable" and "submit the data and we'll take a look and see if it's approvable." In both cases, the company can say, "the FDA told us to submit the data" and not be lying to investors.
Chelsea seems to be trying to put investors at ease, quoting guidance from the FDA that "data strongly demonstrating a short-term clinical benefit (e.g., improvement in symptoms or ability to function) of droxidopa in patients with NOH would be adequate for approval, with a possible requirement to verify durable clinical benefit post-approval." While that sounds positive, it still hinges on strong data. In the 306B trial, Northera showed an effect after one week, but wasn't statistically significant through week eight.
Whether that's strong enough for approval remains to be seen. Chelsea plans to resubmit late in the second quarter, which would put a decision toward the end of the year.
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Fool contributor Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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