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What Happened: Denmark-based Orphazyme said its new drug application, seeking approval for arimoclomol as a treatment option for Niemann-Pick disease type C (NPC), was turned down with a complete response letter.
The CRL issued by the FDA seeks additional qualitative and quantitative evidence to substantiate further the validity and interpretation of the 5-domain NPC Clinical Severity Scale, in particular the swallow domain.
More importantly, the FDA has sought additional data to strengthen evidence beyond the single phase 2/3 clinical trial to support the benefit-risk assessment of the NDA.
According to the company, NPC is a rare, relentlessly progressive, neurodegenerative disease, with an estimated incidence of one in 100,000 live births.
Why It's Important: Orphazyme collaborates with Cytrx Corporation (OTC: CYTR) to develop arimoclomol, the only drug candidate in its pipeline.
After setting an initial PDUFA goal date of March 17, the FDA delayed the decision by three months, rendering the new decision date to June 17.
Orphazyme shares had a volatile ride last week, advancing to as high as $77.77 intraday on June 10, up from the $5.23 at which they closed the previous session. However, the stock has given back much of the gains since then but has continued to be volatile due to frenzied buying by retail traders.
What's Next: While expressing disappointment at the FDA rejection, Orphazyme CEO Christophe Bourdon said the company would focus on its efforts to pursue European regulatory approval. EMA's Committee for Medicinal Products for Human Use is scheduled to give its opinion on the regulatory application in the fourth quarter. An EU approval is expected in the first quarter of 2022, it added.
"We are assessing the potential path forward in the U.S. in partnership with the FDA. In the short-term, we will need to reduce our costs substantially and freeze all company efforts not related to clinical and regulatory activities to support approval for NPC," Bourdon said.
In the wake of the disappointing FDA decision, Orphazyme lowered its operating expense forecast for 2021 from 800 million-850 million Danish Krone ($128 million-$136 million) to 700 million-720 million Danish Krone ($112 million-$115 million).
The company also lowered its cash position expectations of year-end 2021 from 350 million Danish Krone to 50 million Danish Krone.
Price Action: Orphazyme's Copenhagen exchange-listed shares were down 71.28% Friday. The U.S.-listed ADS are down 56.2% at $6.38 in the premarket session on the last check Friday.
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