Encysive shares dive after new delay on lung drug
As shares of Encysive are trading down 42% as I write this, I can’t help thinking again that most of this industry and its investors operate out of ignorance when it comes to managing its new-drug (and biologics) applications to FDA. And I can’t help wondering why, when information is available for guidance. I’m speaking (again!) about the purgatory known as the approvable decision.
Approvable letters are written by FDA when a drug meets minimum regulatory requirements, avoiding the dreaded “not approvable” decision, but when it lacks the necessary demonstrations of efficacy and safety to warrant marketing approval. In April, I published a report that describes comprehensively the recent history (1998 through 2005) of FDA’s approvable decisions. Over 100 approved products (small molecules and proteins) received such decisions during this time period. Of the eventually approved small molecules that were not approved following the first review cycle only 24% received an approvable letter following the second review cycle. Thus, Encysive joins an inglorious minority of sponsors that failed to achieve approval for its new molecular entity after the second review cycle (I’m assuming Thelin will eventually be approved). Will Encysive go for three approvable letters, or will they change tactics?
If there is one thing I learned when researching these approvable decisions it’s this: Argue with FDA over “matters of judgment,” and argue strenuosuly if you believe you have a good case to make, but make your best case in your NDA/BLA, well prior to the first action date for your NME. Repeating prior arguments, with minimal additional evidence in support of them, to answer an approvable letter is nearly always futile. If FDA states that it needs more data prior accepting your arguments, get FDA the data they want. Giving them data you think they need, if not the same as what they think they need, very rarely results in a winning argument. These and other lessons may be drawn from the historical record as described in the report.
