Small Bump In The Road For Pozen's PA


Small Bump In The Road For Pozen's PA

By Jason Napodano, CFA

After the market closed on June 20, 2012, Pozen Inc. (NASDAQ:POZN) announced that the U.S. FDA had provided the company with an Advice / Information Request letter indicating that the FDA has made a preliminary review of the study results and Pozen’s summary analyses of a phase 1 study (115 Study) to assess the bioequivalence of PA-325/40 to enteric-coated (EC) aspirin 325 mg using acetylsalicylic acid (ASA) as the analyte.

According to the letter, the FDA does not agree that bioequivalence of PA-325/40 to EC aspirin 325 mg was demonstrated. It seems as though the phase 1 data Pozen submitted had substantial variability with respect to the blood levels tested in the ASA group. The trial was not adequately powered for such variation in the data, and as a result the phase 1 study came up short of demonstrating statistically significant bioequivalence. The FDA does not seem to have any issues with the approach Pozen took to collect or analyze the data, known as a reference-scaled bioequivalence approach. The data simply was not sufficient (too variable) as submitted.

We remind investors that Pozen has previously demonstrated bioequivalence of PA-325/40 to EC aspirin 325 mg using salicylic acid (SA) as the analyte. Salicylic acid is the main metabolite of acetylsalicylic acid. Generic aspirin manufacturers must show bioequivalence to SA prior to OTC approval. It seems as though for ethical use the FDA is taking the approval hurdle one-step higher, requesting bioequivalence to ASA.

Pozen plans to hold a follow-up call with the U.S. FDA in the next few weeks to clarify the next steps in satisfying the bioequivalence requirement prior to filing the new drug application (:NDA) on PA-325/40. Positive phase 3 data was announced in March 2012. These two trials enrolled 1,049 patients under a special protocol assessment (SPA). In May 2012, the FDA threw Pozen a curveball with respect to the planned NDA filing, asking for data on a lower dose using 81 mg of aspirin. As it turns out, this may actually work to the company's benefit, allowing for the potential approval of PA-81/40 without having to do a pivotal program.

What's Next For Pozen

Pozen plans to hold a follow-up call with the U.S. FDA in the next few weeks. We believe the company plans to conduct another phase 1 bioequivalence study, only this time enrolling more patients and collecting more blood samples. The new trial should have higher statistical powering, allowing Pozen to account for the blood variability levels typically seen with ASA. We believe this trial will start sometime in August 2012 and cost around $1 million. We expect results in October 2012. Pozen's second quarter conference call will most likely take place in early August 2012. We expect an update at that time.

Plans with respect to the PA-81/40 product have yet to be determined. Ideally, Pozen would like to file for a biowaiver (clinical exemption) based on the strength of the PA-325/40 data they generate. Collecting bioequivalence data on EC 325 mg ASA has proved difficult enough. We see challenges to demonstrating bioequivalence to EC 81 mg ASA. In theory, the biowaiver should be approved if the data is sufficient with PA-325/40. However, if Pozen needs to conduct a phase 1 (in vivo) bioequivalence study to EC 81 mg ASA, it would delay the planned NDA filing, which we currently model in the first quarter of 2013.

In the meantime, the only change we are making to our financial model is to add in $1 million in costs in the third quarter 2012. We have made no changes to our expectations on the timing of the NDA (Q1-2013), FDA approval (Q1-2014), or peak sales for PA-325 and PA-81 ($350 million in 2020). We still believe that Pozen will be able to secure a commercialization partner for PA around the NDA filing. This is the major catalyst for the stock.

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