Going From The Lab To Limbo

The FDA has been delaying decisions on applications, and drugmakers are fuming

Shares of Neurocrine Biosciences Inc. (NBIX ) plunged 62% in one day last month, wiping out more than $1 billion worth of shareholder equity. The fire sale was ignited by an unexpected action by the Food & Drug Administration on Neurocrine's application for a new insomnia drug, indiplon. Do not assume, however, that the FDA rejected the drug. For the three different doses of indiplon under consideration it issued two "approvable" letters and one "non-approvable" letter. In other words, two "maybes," one "probably not."

These awkwardly named "approvable" letters are not uncommon -- there have been more than 10 since the beginning of the year. The indiplon case caused considerable grumbling in the pharma industry, however. Such letters can be provoked by safety and efficacy issues or minor concerns about the wording of the medicine's label. This time, says Neurocrine, the approvable verdict was issued because the FDA didn't have time to review the data.

Not enough time? Dr. John Jenkins, head of the FDA's Office of New Drugs would not comment directly on indiplon, but he did say that "a company may amend an application with a new study that comes in fairly late in the review process." In other words, the agency can get swamped -- and in January, Neurocrine was still submitting results requested by the FDA.

The indiplon case is seen by some FDA watchers as part of a worrisome slowdown at the agency, at a time when the industry is already suffering from a malaise of its own making. A dearth of promising drugs in the pipeline and safety concerns about drugs already on the market have sent pharma and biotech stock prices into a trough. Even the upcoming American Society of Clinical Oncology (ASCO) meeting, in Atlanta June 2-6, is a bit of a downer. The meeting had beamed a flattering light on the pharma industry the past few years by showcasing major advances against cancer. This year, no such announcements are expected.

Amid all this comes the FDA's version of a time-out. By law, the agency must reach some kind of decision within 6 to 10 months of a new drug filing; an approvable letter, however, wins the agency another two to six months after an application is refiled -- and a refiling can take anywhere from months to years. Since the vast majority of these drugs go on to win approval, "I really don't get this," says Dr. Steven E. Nissen, a cardiologist at the Cleveland Clinic. He notes that the panels of outside experts that guide the FDA on drug applications always reach a decision by their deadlines. "I know [the FDA is] underfunded and understaffed, but a drug is either approvable or it's not. The approvable letter sends mixed messages."

NO SURE THING

It is actually becoming unusual for a new drug to avoid such an interim phase. And even as approvable notices have proliferated, the number of approvals has fallen, from 119 in 2004 to 80 last year. It's not just the lack of new applications. Agency watchers say the FDA has also become risk-averse as a result of the debacle over Merck & Co.'s (MRK ) painkiller, Vioxx, withdrawn in 2004. Writing about "safety signals" that might have been acceptable in the past, a First Albany Capital report notes: "The FDA's tolerance...appears to have declined," leading to "unsettling surprises."

Those surprises have involved some high-profile drugs. Sanofi-Aventis' (SNY ) diet drug Rimonabant, Encysive Pharmaceuticals' (ENCY )' Thelin for pulmonary arterial hypertension, and Cephalon's (CEPH ) Nuvigil for sleep disorders were all expected to win FDA approvals in the first half of this year. Returned: "Approvable."

The FDA defends itself by pointing to a recent Booz Allen Hamilton Inc. study commissioned by the agency. It found that companies that consulted with the FDA before starting the final clinical trial required for an application had the best chance of winning approval on the first go-round. Even then, however, their chances were little better than a coin toss. Only 52% of the companies that held such meetings won approval in the first review cycle.

DERAILING TACTICS

Companies are often surprised by approvable letters. When Cubist Pharmaceuticals Inc. (CBST ) received one on Mar. 24 for new uses for its Cubicin antibiotic, "we were holding face-to-face meetings with FDA officials that same day," says Chief Financial Officer David W.J. McGirr. But the agency hadn't nailed down the language on the drug's label. Cubicin won approval May 26 for two antibiotic-resistant blood infections that kill 30,000 people a year in the U.S.

A number of approvable letters ask for another round of clinical trials, which can derail a drug completely. Bristol-Myers Squibb Co. (BMY ) announced in May that it is killing Pargluva, a diabetes drug that received an approvable letter last October. The FDA was concerned about the drug's safety, and Bristol said it would take five years to do the additional trials requested. Cephalon dropped Myotrophin for Lou Gehrig's Disease after receiving an approvable letter in 1998 because it couldn't afford to conduct another clinical trial. (A disease foundation and the Mayo Clinic stepped into the breach in 2003 and are co-funding a new trial.)

The FDA's Jenkins acknowledges that approvable letters have become more common in recent years but puts these delays in a positive light. "If you've shown that a product is effective, but there are still issues that need to be addressed, including safety questions, we are probably more likely to issue an approvable letter," he says. In the past, the FDA might have simply rejected the drug.

Many approvable letters are issued for drugs already cleared for other uses. Take Thalomid, Celgene Corp.'s version of thalidomide, pulled from the market as a sleeping aid in the 1960s. The FDA O.K.'d Thalomid for leprosy in 1998, but the drug also works against a deadly bone marrow cancer, multiple myeloma. Celgene sought approval for this drug in February, 2004, and received not one but two approvable letters, the second last November. The agency finally gave the go-ahead in May, a relief for patients. Though Thalomid was already widely prescribed for myeloma off-label, it can be tough to get insurance coverage without an FDA approval.

By Catherine Arnst

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE