Dreamstime
The U.S. Food and Drug Administration rejected an application from the neuroscience-focused biotech
to expand the label of its drug pimavanserin, the company said early Monday.
Though the rejection was expected, the details of the FDA’s letter to Acadia (ticker: ACAD) seem particularly bad. In a brief note out early Monday, Mizuho analyst Vamil Divan wrote that the company would likely need to do one or two more trials if it still wants to pursue approval in the indication, which would have allowed the drug to be used to treat hallucinations and delusions associated with dementia-related psychosis.
Acadia had said in early March that the FDA had “identified deficiencies” in the company’s application. Acadia stock tumbled 45.4% at the time.
Shares are down another 14% on Monday morning.
Acadia pushed back at the FDA early Monday, saying the agency had changed its standards partway through the approval process. In its press release, the company said that the letter denying approval, known as a complete response letter, had criticized aspects of a Phase 3 trial of pimavanserin in patients suffering from dementia “despite prior agreements” related to the study design.
“We had clear agreement with the division on our pivotal study design, and what was required for approval,” said
Steve Davis,
Acadia’s CEO, on a company conference call that began at 8 a.m. on Monday. “We delivered highly statistically significant and clinically meaningful results on primary and key secondary outcomes of the agreed-upon pivotal study. The division issued a CRL based on what appears to be a change in position, now requiring a new set of analyses by dementia subtype that the agreed-upon pivotal program was never intended, designed, or powered to demonstrate.”
Davis said in a press release that the company will “immediately” request a meeting with the FDA.
The company’s president, Serge Stankovic, said on the call that there have been leadership changes within both the FDA’s division of psychiatry and its office of neuroscience while the application has been under review, though the team they have been working directly with had stayed the same. “As far as the impact of that on the decisions and positions at the FDA, I would not like to speculate on that,” Stankovic said.
The early March news of the FDA’s letter regarding “deficiencies” in Acadia’s application set off worries among biotech investors that the FDA was taking a harder line on drug approvals. The rejection Monday morning could reawaken those worries, particularly given the details on shifting criteria put forward by Acadia.
“We already assumed a [dementia-related psychosis] approval would not take place until 2024, but believe the Street may now expect an even longer delay or the possibility that the DRP may never come through,” Divan wrote in his note, which came out before the company call. Divan said that his model would value Acadia stock at $23 to $25 without any dementia-related psychosis revenue. The stock was trading at $21.99 in the pre-market hours on Monday.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
