Has 2020 been a big year for regulatory knockbacks?

A string of high-profile FDA rejections recently prompted biopharma followers to wonder whether the US drugs regulator was finally showing its teeth after a period of perceived leniency. This idea is not supported by the raw numbers, however.

Counting complete response letters is complicated by the fact that many large or private companies do not disclose that they have received them, or certainly not at the time. This means that any attempt to track the rate of knockbacks is likely to be an underestimation. Evaluate Vantage uncovered 24 CRLs issued to the end of August, a figure that does not look weighty when examining rates over the past couple of years. 

This analysis uses EvaluatePharma’s Calendar of Events, which draws from all publicly available press releases, SEC filings and annual reports; this means that those retrospectively announced can be caught. This number will certainly go up by year end, of course – Mallinckrodt's terlipressin was knocked back only this week. 

The chart above could suggest that 2020 is tracking higher than previous years, given that the tally is already approaching 2017's level. However, a further crunch of the numbers, below, reveals that over the past four years August has tended to see the most CRLs sent out.

So if the remainder of 2020 conforms to this trend, the annual CRL count this year will actually be in the same ballpark as the previous couple of years. Again, this analysis is weakened by patchy disclosure, but an August flurry seems to be supported by events this year.

Gilead and Galapagos’s filgotinib, Biomarin’s valrox gene therapy and DBV’s peanut allergy therapy were the biggest projects to receive rejections last month, the first two in particular garnering much attention. Fennec also announced a knockback, for a cancer therapy. August’s four CRLs actually make last month below average in comparison with the same period in previous years.

Other high-profile setbacks this year include the collapse of Intercept’s hopes to break into Nash, and a CRL for Merck & Co’s seemingly unstoppable checkpoint inhibitor, Keytruda.

Still, it was the nature of some of these rejections that prompted speculation of a tightening in the regulatory climate, more than any apparent flurry. Filgotinib was widely expected to sail through and, while the chance of valrox being held up was higher, a green light was considered the likely outcome.

A decline in the standard of applications might explain some of the more surprising knock backs. However, this in turn would surely have been fuelled by a collective belief that regulatory bars have been lowered.

While many would welcome stricter standards, it is also true that investors have benefited from a period of permissiveness from the FDA. Future big approval decisions will be monitored closely for any further signs of a shift in the regulatory climate.