- Valeant Pharmaceuticals' plans to grow its dermatology business hit a snag Monday, when the specialty drugmaker disclosed that the Food and Drug Administration had declined to approve an experimental psoriasis treatment key to the unit's turnaround.
- The regulator issued a Complete Response Letter for Valeant's Duobrii, flagging questions related to the drug's pharmacokinetics, according to a June 18 statement from the company. Valeant was quick to note, however, that no issues were identified with Duobrii's clinical safety, efficacy, or manufacturing processes.
- Shares in the pharma fell 6% Monday morning. While Valeant has made some progress in its multi-year rebuild, the company remains heavily indebted and has struggled to grow outside of its top eye care and Salix brands.
Duobrii, a topical lotion for plaque psoriasis that combines a steroid with the retinoid tazarotene, is one of a handful of new drugs that Valeant has dubbed the "significant seven."
Valeant expects the seven drugs, which currently account for less than $100 million in annual revenues, to earn more than $1 billion within the next five years. The products figure to be a key part of the company's turnaround plans. Yet, it's also reflective of the bruised state of Valeant's R&D that the company doesn't see a blockbuster opportunity for any one of its experimental drugs.
Now infamous for its rapid implosion, Valeant has faced the difficult transition of moving from a model predicated on acquisitions and price hikes to a more traditional research approach to business development.
That transition has come with some setbacks. Approval of a key eye drug was delayed for over a year, for example, thanks to issues at a manufacturing plant in Florida.
Three of the drugs marked as members of the "significant seven" are designed to treat psoriasis: the recently approved Siliq (brodalumab), Duobrii and another experimental treatment known as Bryhali or IDP-122.
Recognizing that its rebuild in dermatology was moving slowly, Valeant in January increased its sales force in dermatology by 25% and prioritized psoriasis as a therapeutic area.
Both steps are aimed at laying the groundwork to double dermatology sales over the next five years — a challenge made clear by a 42% year-over-year drop in revenues from the company's ortho dermatologics unit in the first quarter.
It's not clear how long the CRL might delay Duobrii. That the FDA apparently had no concerns on the drug's clinical profile or its manufacturing is a positive for the company. Still, the rejection pushes out the drug's potential arrival on the market and could slow the company's dermatology ramp-up.
"We are working to resolve this matter expeditiously and have already requested a meeting with the FDA," Valeant CEO Joseph Papa said in a statement.
A decision from the regulator on Bryhali is expected in October, while another experimental drug for acne could receive a nod from the FDA in August.