They say slow and steady wins the race. In the sprint to market the first peanut allergy treatment, hare DBV Technologies $DBVT has just fumbled, announcing on Wednesday that it had rescinded the marketing application for its peanut allergy patch, following discussions with FDA regulators who are seemingly unhappy with the state of manufacturing and quality control data submitted. Meanwhile, tortoise Aimmune $AIMT is now in pole position to leapfrog its rival to secure first-mover advantage in the so-far underserved market.
To be sure, both companies have had their share of ups and downs. In October 2017, DBV reported its treatment — dubbed Viaskin Peanut — was unable to mark a statistically significant separation from a placebo in a Phase III trial, obliterating its shares, although the Parisian drug developer said it would march ahead with a marketing application. Four months later in 2018, arch rival Aimmune came out with pivotal data on its drug, AR101, which were decidedly positive, but investors took issue with the magnitude of patients that dropped out of the drug arm. In response, Nestlé Health Science-backed Aimmune also solidified its plans to submit its application, which is expected by the end of 2018.
“Although the agency did not reference any medical or clinical questions with the submission of Viaskin Peanut, the FDA did communicate that the level of detail with regards to data on manufacturing and quality controls was insufficient in the BLA,” said DBV chief Daniel Tassé said in a statement on Wednesday.
JMP analyst Liisa Bayko was not as convinced. “Management assumes that there are no concerns around Viaskin Peanut’s clinical module because there were no questions from the FDA regarding that section of the BLA. However, the company never directly asked if the rest of the BLA was acceptable for review,” she wrote in a note.
Unsurprisingly the two companies’ shares were trading in opposite directions: DBV’s stock crashed nearly 49% pre-market, while Aimmune’s shares climbed about 6% before the bell.
Analysts keenly watching the trials and tribulations of the pair of drug developers indicated that Aimmune is now well-poised to become the first FDA-approved treatment. They also expressed outrage that DBV provided no clear timeline on when and how the application’s issues would be resolved.
“We are surprised this type of information would not have been discussed with the agency prior to the BLA submission (company has fast track and breakthrough status allowing them increased agency interaction) to ensure the required data was part of the package…this event will only increase investors’ skepticism on management’s ability to execute on its regulatory initiatives, which were already controversial,” Stifel’s Derek Archila wrote.
“While DBVT’s new CEO indicated he anticipates being able to provide the additional information needed to support the re-filing of the BLA, he offered no clear timelines for a BLA re-submission nor timing on when he expects to update investors. The CEO only indicated on the call it would not be “unreasonable” to expect an update from the company during 1Q19, but ultimately we don’t know when it will occur.”
Baird’s Brian Skorney was even more skeptical of DBV’s fortunes, suggesting the delay could spell further disaster:
(T)his dynamic likely lowers the probability that FDA would be willing to overlook the Phase 3 failure. Under a 1H19 review, an AdCom would likely be set up with the company and patient advocates making the case that “there is nothing else available”. Under any likely resubmission timeline, AR101 is likely to have been approved by a Viaskin AdCom and the FDA may be less flexible when a standard of care exists.
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