Map reads quick resubmission from complete response letter

First-pass FDA approval is not the outcome for Map Pharmaceuticals’ migraine drug Levadex. Citing manufacturing and usability issues, the regulator asked the California company to submit additional information to support its application, but importantly no new clinical trials were requested.

Regulatory concerns had always been present for what could be the first non-respiratory inhaled drug to be approved in the US in six years, and investor reaction was swift: shares fell 7% to $15.94 in mid-morning trading today, a negative reaction to be sure but not quite so bad as the losses at the session's opening. A careful handling of the resubmission will be necessary to keep shareholder faith.

Details, details

Without detailing much further, Map disclosed that the complete response letter asked it to address issues about chemistry, manufacturing and controls (CMC) and observations relating to good manufacturing practices at a third party manufacturer for the acute migraine treatment. In addition, the regulator said it had not been able to complete its review of inhaler usability information requested late in the review cycle.

In a call with investors, chief executive Timothy Nelson said executives would be requesting a meeting with the FDA’s staff today to ensure it understands all the information that is being requested. He added that he believes the company has either already supplied that information or can do so quickly, which could make for a swift resubmission of its application.

The company ended the third quarter of 2011 with $112m – it has not provided year-end financials yet – and had a burn rate of $50m last year, so does not need to raise money immediately, Mr Nelson said. Under a marketing deal with Allergan, the first commercial sale triggers a $50m milestone, which will be welcome should the company wish to build a sales team for the primary care market, which the Allergan deal does not include.

A complete response letter has probably put paid to any partnering talks for that primary care market for now (Event - Map holding breath on approval of Levadex, March 2, 2012).

Handle with care

The complete response letter suggests no further clinical work will be required and that the issues can be resolved reasonably quickly, preventing more severe share price losses. The inhaled formulation of the serotonin agonist dihydroergotamine mesylate is the company’s only product, and with forecast sales of $331m in 2016 gives the drug a net present value of $1.15bn, double Map’s market capitalisation at the close of trading yesterday, according to EvaluatePharma data.

Whilst it is not clear exactly the schedule for resubmission, analysts from UBS noted that whilst CMC issues can be fixed, they tend to take longer than executives anticipate. The analysts assume a one-year delay, taking six months to respond to the FDA and a six month regulatory process.

Delaying the forecast launch from June 30, 2012, to June 30, 2013, reduces the net present value to $1.03bn and shaves 22% from the company’s share price, according to EvaluatePharma’s NPV Analyzer.

If further disclosures from the company on the progress of the resubmission, as Mr Nelson promised to make today, suggest delays of a year or more, there may be more room for Map to fall. News emerging from the company’s meetings with the FDA will add necessary clarity.

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