Tricida 'foreshadowed' its CRL — but shares still fall with fear of years-long delay
Nobody likes rejections. But it does help to have a heads-up.
Such is the case at Tricida, which was slapped with a complete response letter as regulators turned down its lead and only drug for metabolic acidosis in patients with chronic kidney disease.
“The CRL was not surprising as it was foreshadowed by an announcement in mid-July that the FDA has identified deficiencies in veverimer’s application,” Cowen’s Phil Nadeau wrote.
That, though, doesn’t guarantee Tricida won’t run into the worst-case scenario in which the delay can stretch into years. It also didn’t stop the stock from dropping another 23.64% to $10.11, following a precipitous fall from $26.20 back in July.
CEO Gerrit Klaerner offered more candid comments in an investor call earlier this month, noting that “it is unlikely we will receive approval to market veverimer in the United States on our PDUFA goal date” since the FDA would presumably clarify its concerns in a CRL.
Having that expectation set lended Klaerner some credibility when he said he’s pleased that the FDA has provided helpful, specific comments and appears willing to work with the Tricida team.
Nadeau, who sees blockbuster potential for the drug, is still a fan. The Phase III results were “convincingly positive,” with veverimer hitting all the endpoints on durable blood bicarbonate levels and safety. A few other things are to blame, according to the analyst:
- the novelty of veverimer’s surrogate endpoint
- the lack of precedent for cardio-renal drugs being granted accelerated approval, and
- the FDA’s diminished communication with sponsors in recent months in light of the lack of in-person meetings due to Covid-19.
Regulators have laid out multiple options to address the problems they see, Tricida wrote in a release. The differences can be huge — and they won’t find out until a Type A meeting later in the year.
For instance, the FDA wants additional data beyond TRCA-301 and its extension trial to assess “the magnitude and durability of the treatment effect of veverimer on the surrogate marker of serum bicarbonate” and how applicable it is to the US population, given only 9% in the drug arm was enrolled in the country.
If regulators end up deciding they need results from the ongoing VALOR-CKD study, Tricida will have to wait until 2022-2023 for interim data and 2024-2025 for final data.
With cash, cash equivalents and investments worth $437 million at the end of the second quarter, Tricida reported that it has a runway up to early 2022.