FDA reversals on UniQure, Moderna approvals worry investors
Investors are worried about the fate of several experimental drugs for difficult-to-treat diseases following recent rejections by the U.S. Food and Drug Administration.
The FDA rejected or discouraged the application of at least eight drugs last year, including a gene therapy for Huntington’s disease, according to RTW Investments. UniQureA gene therapy for Hunter syndrome Regenxbio and a medicine for blood disorders Disc Medicine. The agency initially declined to review ModernaI got a flu shot before reversing course.
In each case, the FDA took issue with the evidence companies used to support their applications. Some studies did not test drugs against placebo. Some companies did not directly measure the drug’s effectiveness; instead they relied on other factors, such as biomarkers, to predict how well the treatment might work.
And in each case, companies accused the FDA of reversing its previous guidance. This has investors wary that a more unpredictable FDA could jeopardize the future of other treatments for difficult-to-treat diseases.
“What investors and key stakeholders hope to see from the FDA is consistency, and right now that appears to be lacking,” said RBC Capital Markets analyst Luca Issi.
In recent years, the FDA has appeared willing to accept drugs for rare diseases that show promise in less rigorous studies than the gold standard randomized, double-blind, placebo-controlled trials. This meant helping deliver treatments faster to patients with conditions where the passage of time could mean loss of functions such as walking, speaking, or even death. It has also sparked controversy from critics who say the policy brings false hope to patients.
The FDA’s recent decisions have investors wondering whether the agency’s bar has changed for other upcoming drugs. In UniQure’s case, the FDA asked the company to conduct a new study directly comparing the treatment to a placebo. UniQure said this contradicts the agency’s past guidance that it could seek approval with trial data comparing UniQure’s treatment to an external database of people with Huntington’s disease.
A former FDA official who spoke to CNBC on condition of anonymity and speaking freely called it the worst kind of regulatory uncertainty, as companies say they are told one thing, then experience something else.
An FDA spokesperson said in a statement that there was “no regulatory uncertainty,” adding that the agency “makes decisions based on evidence but does not provide assurances about results.” The FDA “conducts rigorous, independent reviews, not blanket approvals,” the spokesperson said.
Analysts point to several other companies they watch: Dyne TherapeuticsDeveloping a drug for Duchenne muscular dystrophy; Taysha Gene TherapiesDeveloping a gene therapy for Rett syndrome; Wave Life Sciencesworking on a treatment for a liver condition; And Lexeo TherapeuticsCompany developing a gene therapy for Friedreich’s Ataxia. Shares of all of these companies have fallen this year.
A Dyne spokesperson said the company has maintained frequent, positive and collaborative dialogue with a consistent review team over the past 18 months and remains confident in its development strategy and path forward based on the strength of its clinical results, the rigor of its trial design and its ongoing interaction with the FDA. Taysha, Wave and Lexeo declined to comment.
One of the decisions Stifel analyst Paul Matteis is tracking is a drug candidate. Denali Therapeutics For Hunter syndrome, a rare disease that causes cognitive problems as well as physical defects such as hearing loss and joint problems. The company’s application for accelerated approval is based on a nonrandomized trial, with data showing the drug reduces levels of a biomarker associated with the condition.
According to Matteis, the dataset is harder to argue with than UniQure’s, and there aren’t as many risks associated with the technology used.
“So if they don’t approve it, I don’t know,” Matteis said. “So I think there’s already been a pretty significant change in the regulatory standard for rare diseases, but if they don’t approve Denali, if I were at a company I’d almost say to myself, ‘Can we really have the confidence to conduct an open-label study?’ “I’d be saying.”
Denali Therapeutics CEO Ryan Watts told CNBC that the company continues to have constructive discussions with the FDA and is confident in the strength of its data package. The FDA delayed its review of the application for three months and is now expected to make a decision by April 5.
RBC Capital Markets’ Issi said some investors sense a conflict between the flexibility FDA leaders like Commissioner Marty Makary have publicly committed to and the agency’s recent decisions. Stifel’s Matteis said this has led some to discount the likelihood of success for companies whose paths to market depend on some flexibility in the data the agency will accept.
Christiana Bardon, managing partner of MPM BioImpact, said the path looks clear for companies with simple data. The question for him is how much the FDA should speed up the process to get drugs to patients as quickly as possible for diseases with major unmet needs.
A senior FDA official who spoke to reporters Thursday on the condition of anonymity and speaking freely said the FDA has not changed its position that biomarkers that are likely to predict effectiveness can and will receive accelerated approval and that nonrandomized data can receive full approval. According to this official, the bar is clear.
“If you make a treatment for Alzheimer’s or Huntington’s and you take someone who is severely ill and give them that treatment, they start to get better immediately and dramatically,” the official said. “You take someone with Alzheimer’s into a nursing home and then they leave, or someone with end-stage Huntington’s disease and suddenly they have no Huntington’s symptoms, you’ll get full regulatory approval on two or three patients.
“We only ask for random data when a situation is heterogeneous, the temptation to believe is strong, the therapy is invasive or potentially harmful, the effect size is difficult to detect, and you are likely to fool yourself,” the official said. he added.
