NeurogesX Fails to Win U.S. Approval to Sell Patch for HIV-Related Pain

NeurogesX Inc. (NGSX), a specialty drugmaker that has never reported an annual profit, failed to win approval for expanded use of its pain-treating patch and said it will fire 57 percent of workers. The shares fell.

The Food and Drug Administration asked for more information about the treatment called Qutenza, the San Mateo, California- based company said in a statement today. No investments in further studies are planned and 43 employees will lose their jobs, NeurogesX said.

“We intend to reduce our marketing and sales activities significantly,” Chief Executive Officer Ronald Martell said in the statement.

NeurogesX declined 20 percent to 53 cents at the close of New York trading. The shares have fallen 85 percent in the past 12 months.

The company will seek additional funds or a partnership to prepare for a late-stage trial of compound NGX-1998 for patients with lasting pain from shingles, according to the statement.

“It obviates the logistical issues that seem to be impairing the success of the first-generation product,” Gregory Wade, an analyst at Wedbush Securities Inc. in Los Angeles said in a telephone interview.

Topical Liquid

NGX-1998 is a topical liquid form of high-concentration capsaicin that requires a five-minute application opposed to 60- minute use, both in a physician’s office for lasting shingles pain, which the Qutenza patch was originally approved for in 2009, Wade said.

An advisory panel of outside experts voted last month the company didn’t provide substantial evidence Qutenza works against HIV-associated nerve pain.

An FDA report before last month’s panel vote questioned whether the prescription-strength capsaicin patch proved “substantial efficacy” in treating pain caused by neuropathy linked to HIV. One-third of people with HIV/AIDS experience peripheral nerve damage caused by the virus or drugs used to treat it, according to the Center for Peripheral Neuropathy at the University of Chicago.

More than 1.1 million in the U.S. are estimated to be infected with HIV, according to the Atlanta-based Centers for Disease Control and Prevention.

No Treatment

No U.S.-approved drugs exist for HIV-associated neuropathy, according to NeurogesX. Painkillers and narcotics are recommended to treat the condition, according to the Center for Peripheral Neuropathy. Capsaicin is the chemical that makes chili peppers hot.

Qutenza sells for $675 a patch and has almost 1,000 customers, Anthony DiTonno, the former president and chief executive officer, said at the Lazard Healthcare Conference, according to a Nov. 18 transcript.

The FDA found one test showed Qutenza worked when used for 90 minutes and failed to show effectiveness when used for an hour or 30 minutes. Later analyses based on alternative testing showed the 30-minute application worked, the agency said.

Qutenza failed to show efficacy in both hour-long and 30- minute uses in a second study, according to FDA’s staff report. Again using alternative testing later, the patch showed it worked in the 30-minute application.

The FDA typically only accepts post-hoc studies that it does itself, Bob Rappaport, director of FDA’s division of anesthesia, analgesia and addiction products, said at the advisory panel meeting.

To contact the reporter on this story: Anna Edney in Washington at aedney@bloomberg.net

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net

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