Chiasma shares nosedive after FDA rejects acromegaly drug, asks for more data
- Waltham, MA-based Chiasma on Monday gave further details behind the FDA’s rejection of its rare disease drug for the treatment of acromegaly, saying the agency asked for further evidence of the drug’s efficacy.
- Chiasma will have to conduct another clinical trial – only this time a double-blind, controlled study rather than the single-arm Phase 3 study Chiasma used in submitting the drug for regulatory approval.
- Shares of the company plummeted on the news, dropping over 63% from Friday’s close to Monday’s close.
The FDA did not look favorably on Chiasma’s approach, expressing concerns about the single-arm trial. Chiasma said the FDA recommended a subsequent clinical trial enroll patients from the U.S. and last for a longer duration, in order to ensure control of disease activity is stable.
““We are surprised, disappointed and respectfully disagree with the FDA’s decision,” said Mark Leuchtenberger, CEO of Chiasma. “In the meantime, we are proceeding with our recently initiated MPOWERED Phase 3 trial comparing the safety and efficacy of Mycapssa to monthly somatostatin analog injections to support a potential Marketing Authorization Application (MAA) with the European Medicines Agency (EMA).”
Chiasma has had a challenging path to even make it this far. Mycapssa is the company’s first drug, which it was initially co-developing with Roche as part of a $595 million deal. However, in August 2014, Roche backed out of the deal, leaving Chiasma to carry the drug forward.
However, Chiasma was able to keep the $65 million up-front fee from Roche, as well as a percentage of the milestone payments. This helped the company fund further R&D.
In 2015, Chiasma moved its headquarters from Israel to Waltham, MA, and raised $102 million in an IPO last July.
About 69,000 people worldwide have acromegaly, a disease which causes the pituitary gland to produce too much human growth hormone (HGH) in response to local benign tumors. The excess HGH leads to serious complications, from an overgrowth of bone that triggers arthritis to serious cardiovascular problems. Analysts estimate that the acromegaly market is worth roughly $1.8 billion globally.
The only approved drug for the condition, however, is Novartis's injectable drug Signifor (pasireotide). Signifor is indicated for the treatment of patients with acromegaly who have had an inadequate response to surgery or for whom surgery is not an option. Unfortunately, patients often find this treatment painful.
In Mycapssa, Chiasma had hoped to commercialize an oral formulation. Given the market, there is still potential there if the company can finance another round of clinical testing.
Chiasma recorded a net loss of $36 million for 2015, and had $41 million in cash and cash equivalents as of December 31, 2015.
- The Street Chiasma Craters on FDA Drug Rejection