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Delcath Takes FDA Hassle in Stride, Prepares to Sell New Chemo Device Overseas

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approval for a drug-device combination. “Those are the most difficult devices to get through the FDA, because you have all the challenges of the device, and all the challenges of the drug, and all the challenges of the interaction between the drug and device,” Hobbs says.

Delcath went public in 2001 and raised $7.5 million to start the clinical trials that would be necessary to comply with the FDA’s requirements. The company teamed up with the National Cancer Institute (NCI) to conduct drug-like trials, and overhauled the management team, stocking it with folks who had the experience to take on the FDA’s challenge. Hobbs came from medical device maker AngioDynamics, and McDonald was an investment banker specializing in devices. Krishna Kandarpa, Delcath’s chief medical officer and executive vice president of R&D, was an interventional radiologist who was skilled in using devices to treat cancer patients.

Saturating the liver with chemo isn’t a completely new concept: Some doctors were already doing something similar in an eight-hour long surgical procedure. “Unfortunately that surgery kept patients in the intensive care unit for three or four days and in the hospital for two weeks,” says Kandarpa, the chief medical officer. And the surgery was so invasive it could only be done once. Delcath’s system is minimally invasive—the catheters can be inserted through 2-millimeter incisions—so patients are generally out of the hospital in two or three days, Kandarpa says. “It’s endlessly repeatable,” he adds.

Delcath filed for FDA approval in December 2010, only to be hit with yet another setback. In February, the company received a “refusal to file” letter from the FDA, which said the agency wouldn’t review the product unless Delcath provided detailed hospitalization records on all of the 186 patients that had participated in the trials. “What they felt was lacking was safety data,” Hobbs says.

Problem is, assembling those hospitalization records has been a major hassle. The National Cancer Institute uses paper records and “a database-management system that was antiquated in 1982,” jokes Hobbs. “We’re literally going through massive paper files. It’s extremely time consuming.”

Delcath expects to re-file for FDA approval by the end of the year, and to request faster-than-usual priority review, which the FDA sometimes grants to potentially lifesaving drugs or devices. If the FDA grants this six-month review, Delcath could be in position to market the product in the U.S. as soon as mid-2012.

Amidst all the FDA commotion, Delcath delivered one piece of good news: On April 13, it received approval to market its device in Europe. And the company was awarded the broadest possible label, giving it permission to market its product as a chemo-delivery device for any type of liver disease. The company plans to begin manufacturing the device in Ireland and to start marketing it in Europe at the end of this year.

One big unknown for Delcath is the degree to which hospitals and insurance companies will question the value of the device. In the U.S. trials, patients who underwent Delcath’s procedure achieved a median progression-free survival period of 245 days, meaning their liver disease didn’t worsen over that time. The median for patients in the control arm was just 49 days. McDonald estimates that because melphalan is available as a generic, physicians in the U.S. would be able to obtain the drug for about $6,000—a bargain compared to other new cancer treatments, he contends. For ipilimumab (Yervoy), a new drug from Bristol-Myers Squibb (NYSE: BMY), “a course of therapy costs $120,000,” McDonald says. “Their overall survival is the same as ours. We look at that as a benchmark when we think about our value proposition.”

In the short term, investors will be watching out for a string of news from Delcath. The company soon plans to release additional Phase 2 data. And it will be presenting data on its device at a half-dozen medical conferences planned this fall. Then comes the FDA filing and the European market introduction. Says McDonald: “The fruits of our labors are going to be seen in the next six months. It’s a very exciting time.”

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