Faced with a dilem­ma, the FDA re­jects Cem­pra's an­tibi­ot­ic, de­mands big safe­ty study

Cem­pra de­liv­ered the FDA’s de­ci­sion on its an­tibi­ot­ic solithromycin on Thurs­day morn­ing, a day late and about $185 mil­lion short.

Caught on the horns of a dilem­ma posed by clear ev­i­dence of liv­er tox­i­c­i­ty and a grow­ing de­mand for new an­tibi­otics, the FDA has de­cid­ed to re­ject Cem­pra’s new an­tibi­ot­ic, de­mand­ing a large new safe­ty study be­fore re­con­sid­er­ing its po­si­tion. And the agency flagged a warn­ing that any fu­ture la­bel will care­ful­ly re­strict its use, which will dam­age its mar­ket po­ten­tial.

Cem­pra’s stock plunged 57% by the end of the day, wip­ing out about $185 mil­lion in mar­ket cap as in­vestors re­spond­ed to the worst sce­nario the biotech could have ex­pect­ed.

In a de­tailed out­line of the FDA’s CRL, Cem­pra not­ed that the agency was un­sat­is­fied by the rel­a­tive­ly small num­ber of pa­tients that had been re­cruit­ed to de­ter­mine how safe the an­tibi­ot­ic is. Reg­u­la­tors want them to aug­ment that with a study in­volv­ing 9,000 pa­tients. Cem­pra added:

The CRL not­ed that while the FDA re­serves com­ment on the pro­posed la­bel­ing un­til the NDAs are oth­er­wise ad­e­quate, even in the ab­sence of a case of Hy’s Law or of an­oth­er form of se­ri­ous DILI in fu­ture stud­ies, la­bel­ing will need to in­clude ad­e­quate in­for­ma­tion about the po­ten­tial for he­pa­to­tox­i­c­i­ty, lim­it­ing use to pa­tients who have lim­it­ed ther­a­peu­tic op­tions and lim­i­ta­tions re­gard­ing du­ra­tion of ther­a­py. A com­pre­hen­sive plan for post-mar­ket­ing safe­ty as­sess­ment in­clud­ing an en­hanced phar­ma­covig­i­lance pro­gram would al­so be re­quired.

Reg­u­la­tors al­so cit­ed man­u­fac­tur­ing is­sues in the CRL.

Cem­pra $CEMP faced a big chal­lenge go­ing in­to to­day’s an­nounce­ment. An ex­pert pan­el had of­fered its mar­gin­al sup­port with a 7-to-6 vote in fa­vor of an ap­proval. But they spent much of the day fret­ting over clear signs of tox­i­c­i­ty, which were al­so flagged in the agency’s in­ter­nal re­view. The main ques­tion at the end of the day was whether the FDA would ap­prove the an­tibi­ot­ic and then place a se­ries of pos­si­ble mar­ket-killing re­stric­tions on it or sim­ply re­ject it un­til they could get a bet­ter safe­ty pro­file.

Both the FDA and the pan­el, though, had to bal­ance their very re­al safe­ty con­cerns against a grow­ing need for new an­tibi­otics in an age of ris­ing drug re­sis­tance.

Cem­pra kept the mar­ket wait­ing for the bad news. The com­pa­ny faced two PDU­FA dates for their an­tibi­ot­ic’s oral and IV for­mu­la­tions on Tues­day and Wednes­day. The late news on the dou­ble re­jec­tion fol­lowed by the de­mand for a new tri­al and fu­ture re­stric­tions was enough to leave some an­a­lysts won­der­ing if this ther­a­py has any fu­ture at all. From Baird’s Bri­an Sko­r­ney:

At this point, we don’t see how Cem­pra moves for­ward with solithrom­cyin. The cost of run­ning a 9,000 pa­tient study with­out rev­enues from the drug to help sup­port the burn will be ex­treme­ly bur­den­some. De­spite hav­ing ~$225M in cash now, the av­er­age R&D burn in 2014-2015 was be­tween $15M and $20M per quar­ter when the Phase 3 stud­ies were be­ing run, and that’s on­ly in one-tenth the num­ber of pa­tients the FDA is ask­ing for. Fur­ther, even if ap­proved, se­vere la­bel­ing would like­ly de­ter physi­cians from us­ing it in the broad, front-line macrolide set­ting Cem­pra was hop­ing for. As a re­sult, we are low­er­ing our price tar­get to $2 on low­er prob­a­bil­i­ty of suc­cess and high­er cash burn.

Solithromycin is de­signed to work by med­dling with bac­te­r­i­al pro­tein syn­the­sis. And with a large num­ber of com­mu­ni­ty-ac­quired bac­te­r­i­al pneu­mo­nia pa­tients (CABP) re­sis­tant to the lead­ing an­tibi­ot­ic on the mar­ket, the Chapel Hill, NC-based biotech has won close at­ten­tion for its re­search work.

Cem­pra is one of just a few small biotechs which have been ad­vanc­ing late-stage an­tibi­otics in the pipeline. Nabri­va, Achao­gen and Paratek are three more play­ers in this field, while Big Phar­ma large­ly re­mains leery of a sec­tor well known for high risks and mar­gin­al pay­offs. To­day’s re­jec­tion leaves dwin­dling near-term shots at adding to the num­ber of an­tibi­otics avail­able to the pub­lic.

Secretary of health and human services Alex Azar speaking in the Rose Garden at the White House (Photo: AFP)

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Samit Hirawat (Bristol Myers Squibb)

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Anthony Coyle (Pfizer via Youtube)

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Eli Lilly CSO Dan Skovronsky (file photo)

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President Donald Trump (via AP Images)

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