The FDA’s decision to stand by its rejection of Anika Therapeutics’ osteoarthritis pain treatment Monovisc, despite the submission of further information, will come as a disappointment to the company.
Given that since filing the project three years ago Anika has been rumbling along without the sales a US launch would have brought, the decision might not be too detrimental to the firm's financial survival. But the knockback set its shares reeling, with the price dropping 21%, and hacked $35m from the company’s market cap.
The pre-market approval (PMA) application for Monovisc was filed in December 2009, and the FDA duly issued a non-approvable letter. Anika responded in 2010, submitting further data and analyses, but the agency said no a second time. Early last year, Anika requested an advisory panel review to help it meet the FDA’s requirements, but this too was turned down.
Instead, Anika was permitted a meeting with staff at the FDA’s Center for Devices and Radiological Health (CDRH) in June 2012. At the time, the company said that the meeting had “resulted in a productive dialogue”, and that it planned to submit yet further information requested by the agency.
Accordingly the company seems to have been fairly confident that Monovisc had a sporting chance of being approved by the end of this year. Indeed it insists that there is still hope, saying that it intends to meet the FDA as soon as possible to "determine the next steps" for Monovisc.
Monovisc is a resorbable viscoelastic fluid composed of partially cross-linked hyaluronic acid polymers suspended in saline. It is administered as a single injection to the synovial fluid of an osteoarthritic joint to provide symptomatic relief of joint pain. It has been available in Europe and Turkey since 2008, and was approved in Canada in 2009.
In 2011, the company’s total income was $64.8m, up from $55.6m a year earlier. But the driving force behind this increase was mostly the sales of its flagship product, Orthovisc, a similar treatment for osteoarthritis of the knee which is on the market in Europe and the US.
Two months ago, however, Anika reported revenue of $14.8m for the third quarter – a fall of 20% year on year – and net income was down by almost a half, at $1.6m. This was put down to a blip in manufacturing Orthovisc that prevented the company from filling all its orders, as well as the “economic softness” in Europe and the negative effect of foreign exchange.
Anika currently has cash reserves of $29m, but $12m debt. US approval of Monovisc would have been a nice fillip for the end of the year, but the company now again faces the possibility that it might not come at all.