Apricus Biosciences, Inc. (NASDAQ:APRI) is an early mover in the biotechnology space this week, with the company putting out an update on a regulatory development from its lead development asset.
Unfortunately, for both the company and its shareholders, the update lands squarely on the negative end of the spectrum.
So what happened?
Apricus just reported that the Food and Drug Administration (FDA) in the US has issued a Complete Response Letter (CRL) for its New Drug Application (NDA) for an asset called Vitaros. There is good chance that many reading will already be familiar with this asset, given that it is one of those development programs that manages to pick up quite a lot of outside media attention rooted in its novel mechanism of action (MOA).
It is a topical cream for the treatment of erectile dysfunction.
Erectile dysfunction is a problem that affects around 40% of males at age 40, with the prevalence of complete erectile dysfunction varying between 5% and 15% as age increases from 40 to 70 years of age.
When you consider that the older working-age population, ages 45 to 64, totaled 81.5 million people (26.4%) and that the 65-and-over population totaled 40.3 million people (13%) in the US at the last census (2010), the market potential for a new asset of this type is clear.
Which is why, on the back of the latest news, markets are so disappointed with the outcome of the NDA.
We haven’t seen anything specific in terms of why the FDA decided to issue a CRL, but, as per the press release outlining the development, we know that the FDA identified issues with Chemistry, Manufacturing and Control (CMC) and safety concerns.
So the deal now is that the company has to respond to the FDA if it wants to continue the program but, at the same time, this sort of response can be far more complicated than it might initially seem.
And this uncertainty is reflected in the market response to the news. There’s really no way for markets to ascertain how long a response might take and, at the same time, how much it’s going to cost Apricus to carry through to a resubmission.
If it’s going to cost more than the company can afford to raise without depressing its share price considerably (which, to a degree, is inevitable), there will arise questions as to the value in pushing the asset forward.
So, what’s next?
Well, now it comes down to the above-mentioned uncertainty.
If the issue that the FDA has uncovered is an easy fix, there’s not too much of a concern going forward. A short delay, an easy fix and a quick resolution.
Another big mover in the biotech space this week was Pacira Pharmaceuticals, Inc. (NASDAQ:PCRX) and this one is again rooted in a development asset.
The company announced on Monday that an FDA advisory panel has put forward its recommendations for a drug called Exparel. Just as was the case with Apricus, the outcome of this one wasn’t favorable.
The drug has been designed to be used as a nerve blocker to produce regional analgesia, which is the sort of analgesia used in childbirth. Pacira wanted to add its asset to the list of already available therapies on the back of its potential for providing a safer and more tolerable option to these patients.
But as per the latest result, it doesn’t look as though the company is going to have as easier a ride as it initially hoped it might.
The panel voted 4-6 against recommending the asset’s approval in this indication, citing a range of concerns that spanned both the safety and the efficacy side of the equation as the root of its decision.
So what’s next?
This sort of vote against approval doesn’t always mean a drug won’t get a regulatory green light when it goes up in front of the FDA itself, but it does mean sentiment heading into the decision will be weakened, given the sway that these panels generally have over the FDA’s final decision.
At close of trade subsequent to the review being published, Pacira was down 14%. There’s a good chance the company will stay at these levels heading into PDUFA, which is slated for April 6, 2017.
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