NicOx gets the bad news on naproxcinod

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NicOx confirmed the seemingly inevitable today when it announced it had received a complete response letter from the FDA for naproxcinod, the reformulated naproxen for osteoarthritis pain that was supposed to have a safer cardiovascular (CV) and gastrointestinal (GI) profile. With a demand for additional safety studies as well as analyses of the clinical benefit of the molecule, the FDA response has no doubt dashed any lingering hope that the drug will reach the US market.

Although the potential for European approval next year remains, the chances here also look very slim. NicOx’s Paris-listed shares, already depressed following a negative advisory committee vote (NicOx shares need oxygen not nitrogen after adcom decision, May 13, 2010), fell another 22% in late trading today. In a statement, the French company made no hint about whether it will be ending the project in the US, saying only that it would be discussing next steps with FDA officials, a typical sentiment following a complete response letter but one that does not instil much confidence.

Data challenged

Despite this inevitability, the news must be difficult to bear for investors, particularly those including a French government agency who participated in a €30m private placement at €7.50 a share last year (NicOx asks investors to raise their stakes ahead of pivotal FDA decision, November 27, 2009). Less gutted but still hurting will be those who participated in a €70m rights issue launched around the same time; although the purchase price of €3.49 was heavily discounted, that is no consolation given a market share price today of €2.24 in late trading.

Naproxcinod is naproxen containing a nitric oxide-donating molecule, which NicOx hoped would have a non-detrimental effect on blood pressure in aging osteoarthritis patients when compared to naproxen.

The FDA adcom did not bite, however, questioning the data and measures for CV and GI benefit claimed by NicOx. The nearly unanimous nature of the adcom’s rejection seemed to ensure the fate of NicOx’s bid, and analysts began discounting the drug from their models immediately following the vote.

Hope in the pipeline

In announcing the complete response letter today, NicOx itself seems to be signalling that it is looking to the future rather than dwelling on naproxcinod. It points to its pipeline and cash reserve of €138.5m ($178.9m) on March 31 – an ample supply for a drug-discovery firm.

The company’s announcement of pre-clinical work on two new molecules, NCX 434 in diabetic macular oedema and NCX 1236 in neuropathic pain, seemed to cause a 21% spike in the company’s shares on May 31. That came after NicOx announced May 19 that it was suspending in-house phase II work on anti-hyperlipidaemiac NCX 6560 until naproxcinod’s regulatory position was clarified. NCX 6560’s fate is not yet clear, although the May 19 announcement said the company would be seeking alternative financing to push the drug forward.

It is also worth noting that NicOx's entire pipeline is built around the principle of nitric oxide donation. There may not necessarily be any read-through from the reception its lead product has received at the regulators’ offices, but with a healthy cash reserve the company might be wise to consider candidates from outside its current R&D platform.

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