Allergan may not lose much from latest FDA rejection
- Allergan on Tuesday announced the approval application for its investigational uterine fibroids treatment Esmya received a Complete Response Letter (CRL) from the Food and Drug Administration.
- Regulators issued the letter because they needed more information about Esmya, and because they grew concerned about the drug's safety following post-marketing reports outside the U.S. In November, the European Medicines Agency launched an investigation into Esmya, which is already approved in Europe, after several patients treated with it developed serious liver injuries.
- Despite the EMA's review, Allergan has defended its drug's safety profile. "[T]he tox studies were clean, the controlled clinical trials were clean," David Nicholson, head of research and development, said on a February earnings call. "About 700,000 patients have been exposed to Esmya worldwide, and only four severe cases of liver injury were reported."
Allergan's looking for a suitor to buy its women's health business. A rejection letter isn't a great selling point, but some analysts argue Esmya (ulipristal acetate) won't be a major factor regardless of its approval status.
"Given the previously disclosed EU safety concerns, a CRL for Esmya was anticipated and we had no potential contribution in our model," wrote Cowen & Co. analyst Ken Cacciatore in an Aug. 21 note. "Importantly, with this disclosure now behind us, we believe that investors will once again return their focus to the still improving core operations and the more attractive other pipeline assets — rapastinel, ubrogepant, atogepant, and abicipar."
Three of those assets, rapastinel, ubrogepant and atogepant, are central nervous system drugs — an area that, until recently, accounted for the largest chunk of Allergan's sales. But loss of exclusivity for immediate- and extended-release Namenda (memantine hydrochloride) has drove down revenue there, putting pressure on the company to revitalize the portfolio with new CNS offerings.
Allergan's women's health business has also suffered from patent expirations. In the second quarter, revenue from the unit declined 21% year over year in large part because Allergan's pregnancy prevention pill Minastrin 24 (norethindrone acetate and ethinyl estradiol/ferrous fumarate) went off patent in 2017.
The unit still raked in roughly $370 million in the first half of 2018, and multiple research firms expect the women's health market to grow steadily over the next several years. But women's health has at times proved to be a challenging field for attracting investment.
"There's more activity at this moment with infectious disease than women's health, largely because there's a larger universe of potential buyers," Allergan CEO Brent Saunders said during the company's most recent quarterly earnings call.
Saunders added that Allergan wouldn't know the right price for its women's health business until the FDA made an approval decision on Esmya. It would seem that the CRL combined with new prescribing restrictions in Europe has given the company an answer.
"Ultimately, as I said when we announced the sale, it's important that we get the right value for these businesses. There's no fire sale. We're not looking to dump these businesses," Saunders added during the second quarter earnings call.
"They're strong, good cash flow-generating and earnings-generating businesses. And so we need to ensure that we get the right price and I think getting a deal that is not dilutive would be difficult but not necessarily an impossible hurdle for us."
- BioPharma Dive Allergan's Esmya delayed in US amid EU liver injury cases
Follow Jacob Bell on Twitter