Trevena’s fall from grace — and into penny stock territory — gathered steam on Thursday evening as a slight majority of outside experts at the FDA turned thumbs down on their pain med and lawyers began to pitch a class action suit claiming the company had actively misled investors for 2 years about the biotech’s discussions with regulators.
Already down sharply after the in-house review provided a scathing assessment of mixed efficacy and safety data, the 8-7 vote against an approval carried fresh penalties as Trevena’s stock $TRVN slid down to 71 cents a share in after-market trading.
But it wasn’t just the vote that counted against Trevena.
Attorneys at Bernstein Liebhard accused Trevena execs, specifically ex-CEO Maxine Gowen — who stepped down a few days ago — of misleading investors about an end-of-Phase II meeting with the FDA.
At the time, they note, Gowen said in a May 2, 2016 release that she was “very pleased” with the outcome of its discussions with the FDA about oliceridine (TRV130) and that they had reached a general agreement about the Phase III design.
The agency, though, outlined some deep problems the FDA had with that study in their review of the drug. The firm notes:
(M)inutes from the FDA’s April 28, 2016 meeting with Trevena were released and showed that the FDA:
•”did not agree with the proposed dosing in the Phase 3 studies”;
•”did not agree with the proposed primary endpoint”; and
•”did not agree with the proposed non-inferiority (NI) margin for comparing morphine to oliceridine.”
The FDA, though, has its hands tied when it comes to revealing anything about its discussions with companies about drug development programs — up until and if they do a review for public consumption. Regulators have on a number of occasions noted that companies frequently have their own version of events that veer off the straight and narrow path of honesty. But commissioner Scott Gottlieb has also reneged on promises to do a few simple things to help improve the situation — such as publishing redacted versions of complete response letters.
About the best thing that happened to Trevena was that the negative vote was so narrow, with a large minority backing an approval and leaving some hope for die-hard supporters that the company could yet snatch victory from the arms of defeat.
Investors, though, didn’t like the way any of this was panning out, and Trevena’s share price slid another 25% in after-market trading Thursday evening. It ended the night at 71 cents.
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