Chiasma plunges after FDA rejects product

Chiasma photo: Ouria Tadmor

Chiasma CEO Mark Leuchtenberger: We continue to believe in the potential for Mycapssa. 

Israeli biopharmaceutical company Chiasma (CHMA) announced on Friday that it had received a Complete Response Letter (CRL) from the US Food and Drug Administration (FDA) regarding its New Drug Application for Mycapssa (octreotide) capsules for the maintenance treatment of US adult patients with acromegaly (giantism), withholding approval for the drug. The company's share price has more than halved, and it has a current market cap of some $100 million.

"The FDA advised Chiasma that the Agency did not believe the company’s application had provided substantial evidence of efficacy to warrant approval, and advised Chiasma that it would need to conduct another clinical trial in order to overcome this deficiency," Chiasma stated.

Chiasma added that "the FDA did not note any safety concerns related to Mycapssa in its letter."

The trial that the FDA recommends is liable to mean a long delay in approval for the product, and to cost many tens of millions of dollars.

Chiasma set out to demonstrate that Mycapssa is as effective as Novartis's treatment Signifor. Mycapssa is administered orally while Signifor is administered by injection. Chiasma carried out a trial with a treated group only, with no control group, believing that such a trial would be sufficient, since the efficacy of the active ingredient in the drug had already been proved (by Novartis).

The FDA, however, did not accept this approach. In its statement, Chiasma says, "The FDA expressed concerns regarding certain aspects of the company’s single-arm, open-label Phase 3 clinical trial and strongly recommended that the company conduct a randomized, double-blind and controlled trial that enrolls patients from the United States and be of sufficiently long duration to ensure that control of disease activity is stable at the time point selected for the primary efficacy assessment."

The trial was designed and carried out by Chiasma but was managed for part of the time by Roche, which bought the rights to the product in 2013, but returned it to Chiasma in 2014 after the end of the trial. Roche actually said at the time that the trial had been successful but that it was not interested in the product. It could be that Roche already realized that the regulatory way forward would not be simple.

“We are surprised, disappointed and respectfully disagree with the FDA’s decision,” said Chiasma president and CEO Mark Leuchtenberger today, “The FDA has encouraged us to request an End of Review meeting with the Agency to discuss the path forward, and we will do so.

“We continue to believe in the potential for Mycapssa to help many patients with this orphan disease, and we intend to work diligently on their behalf to obtain U.S. approval. In the meantime, we are proceeding with our recently initiated MPOWERED Phase 3 trial comparing the safety and efficacy of Mycapssa to monthly somatostatin analog injections to support a potential Marketing Authorization Application (MAA) with the European Medicines Agency (EMA).”

Chiasma was floated on Nasdaq in July 2015 at a valuation of $450 million and raised $102 million. The market at which it drug is aimed is estimated to be worth $700 million, and is currently dominated by Novartis. Novartis's patent expired two years ago, so it could be that generic players will also enter the market.

Chiasma states that, at the end of March, it had cash, cash equivalents and marketable securities worth approximately $134 million. This was meant to finance the launch of the product. It may now finance the additional clinical trial.

Published by Globes [online], Israel business news - www.globes-online.com - on April 18, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Chiasma photo: Ouria Tadmor
Chiasma photo: Ouria Tadmor
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