Investopedia: MannKind And The FDA - Here We Go Again

Yet another company has fallen into the purgatory that is the FDA Complete Response Letter (CRL) cycle. While it was not altogether unexpected that MannKind (Nasdaq:MNKD) would get another CRL from the FDA (which is tantamount to a rejection), this nitpicky rejection from the agency will likely set the company back at least another year in its attempt to get inhaled insulin to the market and in the hands of diabetics. 


The Latest Developments
On Wednesday afternoon, MannKind announced that the FDA had sent the company a CRL for its most recent re-application for its Afrezza inhaled insulin. This time the FDA's concerns were about potential differences between the MedTone inhaler used in past pivotal studies and the next-generation device that the company intends to actually launch with approval.

The FDA has now determined that the company needs to run at least two additional new studies (one in Type 1 diabetics and one in Type 2 diabetics) to determine if all of the relevant data is equivalent between the two devices. The FDA also wants at least one arm of one of the studies to include patients using the older MedTone device so that there can be head-to-head comparisons. (For related reading, check out The Curious And Complicated Case Of MannKind.)

To some extent, this is a legitimate request from the FDA. It is fair for the agency to want to confirm that the two devices work in basically the same fashion and produce the same outcomes in patients. Moreover, the FDA's request that the study include at least 12 weeks of consistent use (after a titration period) is not terribly onerous either - after all, diabetes drug studies often run at least a year, and the FDA increasingly seems to be demanding a minimum of two years of data.

In addition to the head-to-head comparison, the FDA wants more mundane data like information on the new device, updated safety information and so forth. (For more, see Dark Days In Diabetes.)

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Does The FDA Help Or Harm?

It is difficult to overstate the importance of the FDA to companies in the pharmaceutical, medical device, biotechnology and diagnostics industries. In short, the FDA effectively gets to decide who is even allowed to compete in the market. It is illegal to sell a drug or device with advertised medical claims without FDA approval, and insurance companies will typically not pay for their use. As a result, investors cannot afford to ignore the workings, or the prevailing mood, of the FDA when considering investments in this sector.

Unfortunately for investors, the FDA is not constant. The agency does not necessarily maintain a consistent view of its own mission, nor how best to execute it. As a result, the regulatory environment can sway back and forth between lenient and stringent, with little recourse for the companies or their investors. That said, understanding how the FDA operates and its shifting moods can help investors navigate these treacherous waters a little more safely. (To learn more, see Investing In The Healthcare Sector.)

Mission and Motivation
First and foremost, the FDA is in operation to help protect public health, primarily by ensuring that companies prove the safety and efficacy of drugs/devices, manufacture them properly, and market them appropriately. Almost every investor has probably heard stories of the traveling medicine shows of the 1800s and early 1900s where hucksters and frauds sold various "patent medicines" that, at best, did not cure anything and at worst were actually quite harmful.

The FDA also has a secondary mandate to help foster innovation in healthcare by working with industry and academia to find better ways to evaluate safety and efficacy and to respond to innovations in medicine. While the FDA is often criticized for moving too slowly, the agency has made strides in expediting the approvals of orphan drugs and oncology drugs, and has worked with the industry to figure out approval pathways for drug/device-hybrids, biologics, gene therapies and other medical approaches that were never contemplated by the legislation that gave the FDA its mandate(s). That said, the FDA is still somewhat behind the curve when it comes to molecular diagnostics, genetic testing and biologics, and that has created ample chaos for companies in these fields.

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Trick or Treat for Biodel?

Biotech CEOs should be forgiven if they feel like the FDA has turned almost every day into Halloween. Companies ranging from Jazz Pharmaceuticals (Nasdaq:JAZZ) to Alexza Pharmaceuticals (Nasdaq:ALXA) to the obesity triumvirate of Vivus (Nasdaq:VVUS), Arena (Nasdaq:ARNA), and Orexigen (Nasdaq:OREX) have all seen the scarier side of the FDA drug approval process lately. The FDA has handed out rejections to the first two, panels have recommended against the next two, and Orexigen has been batted around by investors who wonder if the FDA (or its panel) will take out their knees next. 

All in all, it is easy to understand why shareholders of biotech Biodel (Nasdaq:BIOD) would be nervous these days. Although the company's Linjeta insulin could be a blockbuster for the company, problems with a pivotal study and an October 30 FDA PDUFA date have investors wondering if they are going to be left waiting in vain for the Great Pumpkin on Halloween. 


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I Think I Give Up On The FDA

With tonight's news of Amylin (Nasdaq: AMLN) getting yet another complete response letter (CRL) from the FDA on Bydureon, I am just about ready to give up on the FDA. Even though Bydureon has shown no particular cardiovascular risk, the FDA has decided to ask for a QT study - a request that is going to take at least a year to fulfill (to say nothing of another six months or so for review).

I would love to know why the FDA did not request this back in the first CRL. I cannot stand conspiracy theorizing, but I am beginning to wonder if the FDA has just decided to abandon its supposed mission of evaluating the safety and efficacy of new drugs in favor of just ruling that any and all new drugs are potentially unsafe and therefore unapprovable.

Although I think Amylin has the capital to endure this delay, and I still believe Bydureon is the best drug in its class, I do not know how anybody can just assume that the drug will get approval. It seems clear to me that the FDA does NOT want to approve this drug and will come up with whatever obstacles are necessary to block it.

By the same token, then, this is bad news for any company looking to get a new compound through the FDA. Maybe Big Pharma can still push some compounds through, but it feels like the little companies do not stand a chance.Good luck, then, to Biodel (Nasdaq: BIOD) and its problematic Phase 3 data on Linjeta - if the FDA will not approve Bydureon, I cannot see how Biodel gets through.

I wonder how long this will go on before somebody decides it is time to audit and investigate the FDA and re-examine its mandate. I appreciate and respect the necessity of protecting the public from unsafe drugs, but allowing unmet medical needs to remain unmet simply because of fanciful fears of possible harm does nobody any good. At this point, I argue that the FDA is abusing its mandate and needs a Congressional slap upside the head to remind it of its obligations to facilitate the introduction of new drugs and devices.

Anyways, I do not wish to turn this into a long-winded rant about the FDA, so I will bring this to a close. This is a major disappointment to Amylin shareholders, but it is not the end of the story yet. I still have some hope that this story will work out, but it is definitely going to take longer than I had hoped.

Disclosure - I own shares of Amylin

Alexza Gets A "No" From The FDA

Gotta love the FDA these days, don't you? I always thought the initials stood for "Food and Drug Administration" but apparently I was wrong; FDA now means "Forget Drug Approvals" (or perhaps "F*ck Drug Applicants" for those suitably inclined...).
 
Alexza Pharmaceuticals (Nasdaq: ALXA) is the latest company to run afoul of the agency's safety obsession, announcing the receipt of a complete response letter for its submission for Staccato Loxapine (aka Adusuve) - a fast-acting inhaled drug to deal with acute agitation in patients with severe schizophrenia and/or bipolar disorder. This is a relatively serious and common problem, and the existing therapies are tricky - it is not easy to give a shot to an unwilling patient, nor make them swallow a pill.

According to Alexza, and its partner Valeant (NYSE: VRX), the FDA was concerned about some safety issues seen in early Phase 1 studies and the absence of a "human factors study" for how people might use the technology.

The safety issues basically relate to some short-term changes in lung function seen immediately after administering the drug. Gee... an inhaled drug alters lung function upon use? I'm shocked! What's more, none of Alexza's late-stage studies showed any worrisome adverse respiratory effects - short-term issues occurred, but they either resolved themselves promptly, or could be handled with a normal asthma inhaler. 

Now, a word on the human factors study ... Basically, the FDA apparently wants some sort of study to see what happens when Staccato Loxapine is put into the hands of the Ralph Wiggum's of the world .Will they stick it up their nose? Perhaps they will try to administer it in their ears, or become confused and think it's an exciting new suppository formulation.

I don't mean to be flippant, particularly, for those Alexza shareholders getting hammered today, but I'm getting a little fed up with how the FDA runs these days. A human factors study could have been requested years ago, and I frankly think its ridiculous to just assume that the people who will administer this (mostly orderlies and nurses in in-patient mental treatment facilities and perhaps prisons) can't figure it out with proper training. 

I am not a doctor, and I am not intimately familiar with the specifics of Alexza's safety data, so perhaps there is a legitimate reason for concern. Even still, I can't help feel that the FDA has become actively hostile towards the pharmaceutical industry and new drug applications. This is not the first time that I've seen the agency spring a "gotcha" on a company - asking for an additional trial that could have been requested years ago, or taking issue with data from early studies. I mean, if those Phase 1 safety studies were so problematic, why did the agency allow them to progress to Phase 3?

Hell, the company even ran additional safety studies in special populations, and the FDA didn't see the need for a panel meeting. 

So, what now for Alexza?

I've been interested in this biotech for a while, as I thought loxapine would be an interesting niche drug and a good test case for the company's inhalation technology. Now, though, I do not know what to think. The company froze development on migraine formulations that look interesting, but will require a lot of money to develop. Can Alexza raise those funds now (either through partnership or capital raising) with the FDA putting them on ice?

And what about that fast-acting insomnia compound (AZ-007)? The FDA is arguably even more paranoid about insomnia drugs, so who knows what sort of clinical trials they will demand from Alexza.

With cash on hand and effective technology, the stock probably has a floor somewhere in the $1.00 - $1.50 region. I think the stock is worth more than that, but the company will not be getting those milestones from Valeant any time soon and who knows what sort of supplementary studies ALXA will have to agree to perform.

If you really want to live wild, I can understand buying these shares on today's inevitable crushing decline. After all, the freaking drug *WORKS* and I do believe these safety issues can get ironed out. If you cannot handle a LOT of risk and uncertainty, though, it may be better to step aside at least until the company can lay out what it has to do to convince the FDA to grant approval.

Facts Versus Food

If there is a demand, you can assume that a company will step up to supply it. While the seemingly unstoppable rise in obesity may make one consider how much Americans really care about what they eat, there is undeniably strong interest in so-called "functional foods". It is not enough anymore to just call your product "fresh", "natural", or even "organic" - no, these days consumers want your product to prevent their heart disease, clean their colons and give them shiny, healthy hair. 

Trouble is, the science behind many of these claims is (to be charitable) lacking and seldom meets the standards of the major peer-reviewed journals. Consequently, the FDA and FTC have stepped up their attempts to enforce rules about unsupported nutritional claims. That could be bad news for packaged food companies ranging from Coca-Cola (NYSE:KO) to Unilever (NYSE:UL), as these claims are often baked into the ad campaigns and constitute what the companies hope will be enduring ways to differentiate their product in the aisles at your local Wal-Mart (NYSE:WMT). 


The link below leads to the full piece on Investopedia:
http://stocks.investopedia.com/stock-analysis/2010/Facts-Versus-Food-KO-UL-WMT-K-GIS-KFT-DPS0929.aspx

FDA Panel Rejects Vivus Obesity Drug

Wow!

I am cynical and bitter enough that very little surprises me any more (hey, I lived in DC four years, worked on Capitol Hill for a year, and worked for investment firms through two bubble/busts!). But I have to say that I am very surprised to see Vivus get KO'd at the FDA.

In a 10-6 vote, the FDA's panel voted NOT to recommend Qnexa for approval. The panel was apparently bothered by the risks of depression, birth defects, and memory loss, particularly in relation to the weight loss benefits seen with the pill. Overall, it looks like a lack of safety data is what really bothered the panelists.

Now, the FDA could go against this recommendation and approve the pill anyway. In the wake of the panel decision, even representatives from the FDA expressed surprise and made comments that could be interpreted as suggesting the panel was too conservative and was not "strongly" opposed to Qnexa.

The FDA did ignore a negative panel vote on an obesity drug before; that years ago when a panel voted against a weight loss drug called Redux. The FDA approved the drug anyway, the drug was a major hit initially ... and then was withdrawn because of severe side-effects. All in all, it cost Wyeth (now part of Pfizer) billions in legal costs and class-action settlements.So, I have to think that the FDA is going to be *extremely* cautious about doing anything that could repeat that disaster.

What's more, I hate to say it, but drugs like Qnexa are not strictly necessary. You *can* lose weight without drugs. I speak from experience; I have been fat my entire life, but I have lost about 65 lbs in the last 9 months, and I have not been using any pharmaceuticals (just diet and exercise).

Vivus' news is clearly going to chill the sector. I would expect to see Arena and Orexigen both sell off tomorrow on the presumption that the FDA is just not receptive to less-than-perfect obesity drugs. I think Orexigen's drug Contrave is particularly at risk - the efficacy is not that great and the side-effect profile was worse than Qnexa.

Arena does still have an outside shot here. The drug is not extremely effective, but it does help some. What's more, while it has side-effects, they do not seem to be too serious. My bigger fear, though, is that Arena gets caught up in guilt-by-association with Redux. Arena's drug lorcaserin is superficially similar to Redux and my fear is that the FDA panel looks at it and says "eh, why risk it?" and blacklists without realizing that Arena is different. Redux non-selectively stimulated 5-HT2b receptors; lorcaserin selectively stimulates 5-HT2c receptors. That is a major difference at the biochemistry level, and Arena's trials have shown none of the valvulopathy and pulmonary hypertension risks that doomed Redux, but will the panelists or the FDA care?

Vivus is not doomed yet. There is the chance that the FDA will overrule the panel. Vivus could also elect to try again when data from a 2-year study comes out later this quarter. Alternatively, the company may have to do a massive (10,000) additional Phase 3 study to fully allay these worries. Given the environment for financing right now (and the unusual deal that Arena had to strike with Eisai), I am not sure they can afford that.

All in all, a very surprising day. 

The Future Of Stem Cells

There has been no shortage of hype regarding the possible therapeutic uses of stem cells. To date, though, there has been a lot more hope than clinical results, no doubt in part to research restrictions imposed by the prior U.S. presidential administration. While companies ranging from the huge Pfizer (NYSE:PFE) to the much, much smaller Osiris Therapeutics (Nasdaq:OSIR) and StemCells (Nasdaq:STEM) are gamely trying, it may be a decade (if ever) before we have any late-stage clinical success stories to talk about with stem cell therapies. 

That does not mean, however, that stem cells may not have a major role in medicine and drug development long before then. One of the more interesting concepts in development right now concerns the use of stem cells in the drug design, validation and testing process. If successful, stem cells could significantly alter the preclinical drug development process and lead companies to more successful clinical trials and more productive drug development. 


The full article can be read at:
http://stocks.investopedia.com/stock-analysis/2010/The-Future-Of-Stem-Cells-PFE-OSIR-STEM-CRL-AZN-GSK-GERN-LIFE0615.aspx