For years, it was a two-com­pa­ny race to de­vel­op the first treat­ment for peanut al­ler­gy. Then in Jan­u­ary, Aim­mune won ap­proval for its peanut pow­der pill and now it looks like their com­peti­tor and the erst­while fron­trun­ner is strug­gling to stay alive.

DBV Tech­nolo­gies said to­day that it has not heard from the FDA since the agency said they were con­cerned about how ef­fec­tive DBV’s ex­per­i­men­tal peanut patch would be and, as a re­sult, plan to lay off a “sig­nif­i­cant” num­ber of em­ploy­ees. These cuts will be part of a “glob­al and com­pre­hen­sive re­struc­tur­ing plan” that will be­gin im­me­di­ate­ly and at­tempt to keep the com­pa­ny sol­vent past Q1 2021.

A spokesper­son for DBV de­clined to com­ment on how many em­ploy­ees would be laid off and in what de­part­ments, but the com­pa­ny’s re­lease in­di­cates they will si­lo them­selves tight­ly around their lead drug, scal­ing down both their oth­er clin­i­cal pro­grams and their pre­clin­i­cal re­search. Those pro­grams in­cludes a cow’s milk al­ler­gy patch, a hen’s egg patch, a di­ag­nos­tics pro­gram with Nestlé and five oth­er non-dis­closed projects.

Daniel Tassé

“We have care­ful­ly re­viewed the sit­u­a­tion and giv­en the pre­vail­ing un­cer­tain­ties, the goal of the plan that we are launch­ing aims to pre­serve our core func­tions, ex­tend our cash run­way and main­tain op­er­at­ing lat­i­tude to bring the first and on­ly epi­cu­ta­neous im­munother­a­py for the treat­ment of peanut al­ler­gy to pa­tients in need, if ap­proved,” CEO Daniel Tassé said in a state­ment.

The trou­bles for DBV be­gan near­ly a year and a half ago, when the French com­pa­ny pulled their first FDA sub­mis­sion, cit­ing con­cerns that the BLA lacked “suf­fi­cient de­tail re­gard­ing da­ta on man­u­fac­tur­ing pro­ce­dures and qual­i­ty con­trols.” Known as Vi­askin, the com­pa­ny’s patch is de­signed to build tol­er­ance in kids with se­vere peanut al­ler­gy. Aim­mune was try­ing to do the same with a pill, but DBV had got­ten to reg­u­la­tors first, and were in a po­si­tion to be­come the first ap­proved ther­a­py be­fore they with­drew the ap­pli­ca­tion.

DBV re­filed last Au­gust and the FDA ac­cept­ed their re­view in Oc­to­ber, set­ting up an ad­vi­so­ry com­mit­tee hear­ing in May and a de­ci­sion by Au­gust 2020.  Then in March, two months af­ter Aim­mune won ap­proval, DBV dis­closed that the FDA had ques­tions about their sec­ond patch too, this time about ef­fi­ca­cy.

The com­pa­ny had just missed the pri­ma­ry end­point on their Phase III tri­al, falling short of a 15% con­fi­dence in­ter­val they had set for im­proved peanut tol­er­ance af­ter one year. Tassé said, though, that the is­sue had to do with re­ports that kids could scratch the patch off.

“This has noth­ing to do with the 15% con­fi­dence in­ter­val,” he told in­vestors on a con­fer­ence call. “The ques­tion for the agency has to do with the po­ten­tial im­pact on ef­fi­ca­cy of path ad­he­sion and patch at­tach­ments.”

DBV sub­mit­ted da­ta it said showed the stick­i­ness of the patch didn’t in­ter­fere with ef­fi­ca­cy. Nev­er­the­less, the FDA can­celed the ad­vi­so­ry com­mit­tee hear­ing, rais­ing con­cern among some an­a­lysts that a de­ci­sion on the drug would like­ly be de­layed and it could be re­ject­ed.

“At this point, we view DB­VT as ef­fec­tive­ly dead in the wa­ter,” Baird an­a­lyst Bri­an Sko­r­ney, who has been con­sis­tent­ly bull­ish on Aim­mune’s prospects, said in a note.

Joseph Schwartz of SVB Leerink, though far less bear­ish, still called it “a sticky sit­u­a­tion.”

“With many cur­rent un­knowns,” he wrote, “we look for­ward to up­dates on DB­VT’s dis­cus­sions with the FDA and the next steps for Vi­askin Peanut’s BLA re­view.”

Now DBV said that al­though it asked for guid­ance, dis­cus­sions nev­er ma­te­ri­al­ized, aside from a mes­sage that the da­ta were be­ing re­viewed and the tar­get date for a de­ci­sion was still Au­gust 5. The com­pa­ny’s cash bal­ance now stands at €262.4 mil­lion. With the cuts, that will be enough to go “be­yond” first quar­ter of 2021, they said.

So­cial: Daniel Tassé (DBV Tech­nolo­gies)

It seems Nestlé is experiencing some buyer’s remorse two years after throwing down $2.6 billion for Aimmune Therapeutics and its peanut allergy pill Palforzia.

CEO Mark Schneider announced on Tuesday that Nestlé is “exploring strategic options” for Palforzia following lower-than-expected demand. A company spokesperson declined to confirm whether a potential sale is in consideration.

“The review is expected to be completed in the first half of 2023. Going forward, Nestlé Health Science will sharpen its focus on Consumer Care and Medical Nutrition,” the company said in a news release.