Biotech companies that bet the farm on a single drug usually get crushed when the FDA says ‘No’ to that molecule. It’s the time investors usually shoot first, and ask questions later.
But the folks at Mountain View, CA-based MAP Pharmaceuticals (NASDAQ: MAPP), have to count themselves fortunate this week. In a rare case for a development-stage biotech company, investors are giving it the benefit of the doubt. The company’s lead drug candidate for acute migraine headaches got turned down by the FDA, and after an initial downward twitch in its valuation, the company bounced back, closing yesterday at $16.19, giving it a valuation of $494 million. That’s essentially in line with where it was before the FDA’s discouraging word.
The future of MAP, which has burned through more than $220 million since its founding in 2003, now depends on the FDA’s questions being minor and quickly solvable. The company’s treatment, dihydroergotamine, is an old injectable medicine for migraines that MAP has turned into an aerosol called Levadex that’s supposed to be more convenient for patients. The FDA, in its complete response letter to MAP, didn’t mention any need for further clinical trials, but did have questions for the company about manufacturing processes and the usability of its inhaler.
If MAP can resolve the FDA’s questions and win approval, then it would be able to tap into a potentially big market along with its partner, Irvine, CA-based Allergan (NYSE: AGN). About 30 million people in the U.S. complain of some form of migraines, and the U.S. market for competing drugs known as triptans was worth about $1.6 billion in 2010, according to MAP’s most recent quarterly report. Since the existing drugs are oral pills, and patients with migraines often suffer from upset stomachs, MAP is wagering that its drug will be the alternative that provides fast pain relief, with less of the dizziness and nausea patients sometimes get on existing meds.
“Our goal is to respond to the [FDA’s] complete response letter as aggressively and quickly as we can, and get a product out there we think can help a lot of people,” CEO Tim Nelson said yesterday in a phone interview.
How long it will ultimately take for MAP to answer the FDA’s questions is anybody’s guess. While investors were clearly relieved that MAP isn’t being asked to conduct any more long-term clinical trials to assess safety or effectiveness, the company still can’t say for sure how long it will take.
To understand the gist of what’s going on, there are three basic steps to the manufacturing of MAP’s product. The first part of the supply chain, Nelson says, is handled by a contractor that makes the particles of the active drug, the second group fills the medicine and aerosol propellants into a metered can, and the third group molds the plastic parts and packages the drug into its inhaler. For competitive reasons, MAP isn’t naming its suppliers, Nelson says, and he also wouldn’t say whether they have prior experience with FDA inspections regarding drugs like this one. He did say, however, that the FDA’s questions were about the second contractor that does the filling, and whether it was following standard procedures known as GMP (Good Manufacturing Practices).
The second line of questioning that MAP says the FDA raised is about the usability of the drug. That means the FDA wants to be sure that when patients have the drug in their hands, they can follow the instructions and use it as intended.
There is a reason to ask about usability, since MAP uses an inhaler that’s different than the typical asthma inhaler that blasts particles into the back of your throat. MAP’s technology, which is proprietary, enables its drug to be “breath synchronized,” in Nelson’s words. This means patients can breathe the drug in at their own pace, rather than time their inhalation with pressing the button on the inhaler, Nelson says.
Data on usability of the MAP inhaler was gathered from clinical trials, and included in the original application 10 months ago, but it was put together in four different parts of the voluminous application, Nelson says. Late in the review process, Nelson says, an FDA staffer made a request to the company to put all the data in one place so that it’s easier to review, Nelson says. He says the data in the Levadex application is strong, with more than 1,000 patients studied in trials, encompassing 10,000 headaches. [Correction: 4:45 pm 3/30/12] MAP found that 96 percent of patients in an ‘instructions-for-use’ study were able to take the drug properly without any external aid. [Editor’s note: an earlier version of the story said the 96 percent figure applied to the 1,000 patients across MAP’s clinical trials, when it should have been in reference to the smaller “instructions-for-use” study.]
Ultimately, this is a story that will say a lot about MAP’s credibility. Investors have to take MAP’s characterization of the FDA’s concern at face value, because the agency’s “Complete Response Letters” aren’t public records. But if MAP’s interpretation of the letter is consistent with that of the FDA, then shareholders have good reason to believe the delay will be measured in weeks or months, not years.
One thing is for sure. If this regulatory delay does end up dragging on, then MAP will no longer be able to consider itself one of the lucky biotechs getting the benefit of the doubt.
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