VC Financing: Enter Comparative Trials and REMS Post-market Plans

In Washington, the policymakers and legislators are arguing over how to build comparative effectiveness research into the health reform bill.

Eleven miles away in the Maryland suburbs at the Food & Drug Administration’s new White Oak campus, the regulators are figuring out on a case-by-case basis how to apply their new authority to order post-approval education, distribution and testing programs for new drug approvals. under the Risk Evaluation & Mitigation Strategies authority.

But in the private capital markets removed from the political capital, these two issues are already moving from the conceptual, formative stages into real world requirements. Drug and biological entrepreneurs are learning that they better have answers to questions about both requirements when they go into venture capital firms for development funds.

VCs now expect companies seeking funding to bring in plans for comparative research during drug development and to recognize early what level of post-marketing controls FDA will require.

That’s what MPM Capital’s Gary Patou (in the picture above) told a session on successful drug development plans at the recent annual meeting of the Drug Information Association in San Diego. Clear plans for comparative effectiveness testing and post-marketing controls are becoming de rigeur parts of solicitations for funding from VCs, he says. (For a longer examination of the new de facto requirements for drug development plans from venture capital firms, see this story from The RPM Report.)

That means that the funding spigot from private capital will help enforce and establish the new government additions to drug development. Policy is made in DC, but practice is enforced by VCs.

Wacky World of Generics: REMS Edition

Here's a "Catch-22": If the Food & Drug Administration prohibits sale of a drug outside of a tightly controlled restricted distribution program, how on earth is a generic company supposed to obtain supplies of the product to use as a comparator in bioequivalence trials?

If you are Dr. Reddy's, hoping to be first to challenge the patents on the anti-cancer agent Revlimid, you ask nicely. And if you are Celgene, apparently, you answer "no way." That, at least, is how Dr. Reddy's describes the situation in a citizen petition filed with the Food & Drug Administration earlier this month. (We have the full story in "The Pink Sheet" DAILY.)

This petition has all the markings of a test case. The goal is not so much to accelerate a generic challenge to Revlimid (the earliest a generic launch could possibly come is three years from now) but rather to define a process to assure that the new Risk Evaluation & Mitigation Strategies authority given to FDA in 2007 doesn't become a perpetual exclusivity award for sponsors.

The law (known as FDAAA) states unequivocally that restricted distribution programs are not to be used to block or delay generic competition. It's just that, well, it's one thing to say that, another thing to make it so.

Certainly, George Horner--the former CEO of Prestwick Pharmaceuticals--doesn't see any realistic way for generics to compete against products covered by REMS. He told us that in a story on the fascinating development program--and flurry of business development activity--for the Huntington's chorea therapy Xenazine. (You can read all about it in The RPM Report.)

In the petition, Dr. Reddy's is proposing a process that would essentially allow generic manufactures to obtain an authorization from FDA for studies, and then compel manufacturers to provide samples (at market prices) for use in bioequivalence trials. That certainly seems reasonable enough--and we bet (after much regulatory machination) FDA ends up setting a policy along those lines to eliminate the Catch-22 facing Dr. Reddy's.

But that still doesn't address the bigger issue: While it is presumably simple enough to create a bioequivalent version of the active ingredient in Revlimid, is it really possible to create a generic equivalent to the restricted distribution program for the drug? Celgene would argue no. In fact, the company has argued no in the context of the predecessor product--the notorious thalidomide. (Read more about that case here.)

Put another way: does FDA really want to make it simple for dozens of sponsors to launch versions of drugs like thalidomide, when the agency has already determined that the risks of inappropriate use are high enough to merit costly, burdensome post-marketing restrictions? Our hunch: products covered by restricted distribution programs will end up looking more like biotech therapies facing follow-on competition than they will like conventional generic drugs.

And, for now, there isn't even a clear-cut way for generics to begin the process of proving bioequivalence.

Waiting on Prasugrel: No News is Good News

Another NDA, another missed deadline.

This time around, it’s a product upon which Eli Lilly has hung much of its future, the anti-clotting drug prasugrel (Effient).

Lilly has already been on a rollercoaster ride on Wall Street over prasugrel once the risks associated with the drug surfaced (32% increased chance of bleeding). And time is not on Lilly’s side: the company is racing to establish the drug on the market before 2011, when Plavix generics will complicate the anti-clotting landscape.

Prasugrel has also been closely watched as another sign of how FDA will use its new risk management authorities under the FDA Amendments Act. The billion-dollar questions: would FDA agree that the bleeding risk associated with prasugrel could be appropriately managed by a REMS, or is more needed for approval? And is there any chance for a relatively clean label?

All that makes prasugrel the closest-watched drug approval this year. Indeed, between the September 26 prasugrel user fee deadline and the Wall Street bailout agreement, there were more than a few investors who were constantly refreshing their computer screens as Friday wore on.

While a bailout deal may be at hand, we’ll have to wait a little longer to find out about the fate of prasugrel. For now, Lilly’s not talking, except to say—in a press release that crossed the wires at 5 pm on Friday—that FDA would miss the deadline, that the review is “very far along,” and that Lilly “remains optimistic” that an approval is imminent.

Wall Street’s immediate reaction was not positive—the announcement drove Lilly shares down 3.9% to $45.01 in after-hours trading, and shares opened lower this morning. Les Funtleyder at Miller Tabak expressed his frustration in a research note: “This has become a bit of an unsettling trend at the FDA. The decision tree used to be pass or fail, now there is a third column, the ‘I don't know.’” (Hat tip to CNBC).

We think that pessimism is misplaced.

We told you three months ago why we think FDA will approve prasugrel, and that reasoning hasn’t changed. Indeed, the fact that the agency missed the user fee deadline bodes even better for the drug’s prospects, because it indicates—barring any last-minute surprises—that an approval is close at hand.

Here’s why: Since FDA’s drug review divisions were given the green light to start missing deadlines, most of the applications delayed by workload issues were eventually approved within weeks, based on a recent analysis in The RPM Report. (If you don’t already subscribe, you can sign up for a 30-day trial to access the story.)

For one recent example, look no further than Amgen’s Nplate, which cleared FDA a little over two months after the user fee deadline. GlaxoSmithKline’s Entereg was approved 10 days late. UCB Pharma’s Cimzia was three weeks late. And there are other examples of how small allowances for heavier workloads at FDA have led to product approvals.

There are many reasons for a missed deadline, and some (like finding enough members to staff an advisory committee) have led to months-long delays for new products. But that’s doesn’t appear to be the case with prasugrel: “This is a very large, complex submission, and it should not be surprising that delays occur,” Lilly said.

Given the much-ballyhooed size of that NDA package, perhaps it’s not surprising that it would take FDA extra (and then some more) time to read through it. The absence of an advisory committee meeting for prasugrel is also a positive sign, given that drugs without one have a greater chance for a first cycle reviews.

Sanford Bernstein analyst Tim Anderson agrees that no news is good news: “Our best guess at this point is that while the Effient review is not yet complete, a final decision by FDA is not likely to require that LLY/Daiichi-Sankyo generate new clinical data; the issue may be a smaller one like finessing the label, the risk management plan, etc.”

We couldn’t agree more.

Wacky World of Generics: Thalidomide Edition

Even the title has to cause shivers or a good shake of the head. Thalidomide? Generics? The two words don’t belong together: it can’t be possible.

How can thalidomide (the infamous teratogen and source of the crisis that led to the 1962 FDA efficacy amendments) be the source of a debate about generic use? This is not wacky. This should be inconceivable.

But it’s not.

Celgene’s highly successful Thalomid brand of thalidomide, with sales last year just short of $450 million, has passed its tenth year on the market. And it faces a generic challenge from Barr Labs, which has an ANDA pending for the drug’s initial orphan indication, treatment of the cutaneous lesions of erythema nodosum leprosum.

Now, a struggle is developing on the ability of generic companies to replicate the tight risk management program that Celgene developed to make thalidomide a commercial product.

To get Thalomid to the market, Celgene developed a strictly controlled distribution and patient contact /education program called STEPS. The company devotes more than 175 employees to maintain its risk management programs. The program is so important to the commercial use of the product that Celgene has a patent on the program itself.

STEPS may represent a steep barrier to generic copies; at least that is what Celgene hopes. The company has laid out its arguments against FDA approving generics in a petition filed with the agency a year ago: Sept. 20, 2007. (For an anlysis of the Celgene petition, see our coverage in “The Pink Sheet.")

FDA’s eventual decision as to whether the thalidomide risk management program can be copied or mimicked will be of major significance to the entire industry.

As FDA begins to require more risk management programs (now called REMS – Risk Evaluation & Mitigation Systems) as integral parts of NDA approvals, these post-market controls have the potential to significantly lengthen the life of brands.

Or as Celgene pointedly argues to FDA: "In many ways, the survival of the company depends on the successful implementation of its novel restricted distribution plans." Give away its risk management program to another marketer and FDA will give away the core of Celgene’s ability to market thalidomide safely. The company notes that it has successfully prevented patients from experiencing the horrors of the teratogen. If another company is distributing the ingredient less carefully, it would hurt the public, the drug industry and Celgene’s brand.

But FDA was specifically instructed in the FDA Amendments Act (passed a year ago in September 2007) to prevent companies from using REMS as barriers to generic competition. Something is going to have to give.

The decision on STEPS will be one of the important early precedents arising from FDAAA. It is significant that Celgene used ex-FDA general counsel Dan Troy to craft its arguments to protect STEPS and Thalomid.

Not only is Troy a prominent figure on the issue of FDA’s ability to control industry marketing practices, he has also recently become the general counsel of GlaxoSmithKline – assuring that the issue of the value of REMS as a way to block generics will get the attention of at least one other major pharma player. Indeed, GSK has been--by accident if not design--one of the most active early players in shaping how the REMS authority will be used, having already agreed to three programs for its new products, and with a fourth pending for Promacta.

In the wacky future world of generics, companies will have to learn how to replicate post-marketing control programs as well as how to replicate the chemical structures. The safety programs may turn out to be harder to copy.

The REMS Pioneers: Amgen’s Nplate Sets Another New Standard

Hymen Phelps & McNamara attorney Frank Sasinowski has a prop he likes to use when he calls on Food & Drug Administration reviewers to talk about a regulatory issue.

It is a new drug application filed by Wyeth 50 years ago. It includes, he says, everything you get in a modern NDA. Evidence of safety and efficacy. A chemistry, manufacturing and controls section. Proposed labeling. Everything.

And you can hold it in one hand, a thin stack of paper, organized by a single binder clip.

It sure is eye-catching. Today’s NDAs are so large and complex it is now silly to imagine them in printed form, except for colorful analogies like Eli Lilly & Co. saying the prasugrel (Effient) NDA would be as tall as the Empire State building if it was reduced to stack of paper.

Sasinowski’s message?

The vast increase in complexity of NDAs is not related to a change in the standard for approvals per se. Rather, it is a result of decisions made by individual FDA reviewers about how much evidence they need to be convinced to allow a drug to be approved.

Well, it looks to us like history is repeating itself in the form of rapidly expanding stacks of paper necessary to comply with the FDA's new Risk Evaluation & Mitigation Strategy authorities. The REMS were created by the FDA Amendments Act of 2007, and we are living through history as FDA and the pharmaceutical industry create a new regulatory framework on the fly.

FDA has now used the REMS authorities about half-a-dozen times for new approvals, and the level of complexity is leaping exponentially—at least as measured by page count.

The first handful of REMS were dealt with in the context of the approval letter FDA sends to sponsors of all new drug applications: less than a page of text invoking the legal authority for a REMS, informing the sponsor of the need for a mandatory medication guide, and setting a bare bones assessment schedule. (You can read The RPM Report's coverage of the “REMS 1.0” group here.)

Then came Entereg. The GSK/Adolor post-operative ileus therapy had the first REMS that included restrictions on access (limiting distribution to hospitals who register with the sponsor) and use (no more than 15 doses in the in-patient setting). In addition to an overview of the REMS in the approval letter, FDA released a 24-page summary of the program, including copies of the packaging and registration materials. (You can read The RPM Report's coverage of the Entereg REMS here.)

Now comes Nplate. Amgen’s new platelet boosting therapy to has a still more restrictive REMS, involving registration of institutions, prescribers and patients. (The first in-depth look at that program appears in “The Pink Sheet.”)

The page count? Ninety-four.

So, in the six months since the REMS authority took effect, we have already seen the approved versions of the program expand about 100-fold.

If that trend continues, maybe the Effient REMS will also be as tall as the Empire State Building?

FDA's Brain Drain Continues

Sometimes it just doesn’t pay to work at FDA.

Even as FDA bulks up its drug review ranks with new money from Congress, attrition continues to affect the agency—including high-level defections to industry. Indeed, drug sponsors are more than willing to bring former agency officials into their ranks and pay them much more than the average government salary.

Florence Houn is the latest to jump ship; as reported in “The Pink Sheet” this week, the FDA official has been hired by Celgene as VP-regulatory policy and strategy.

Most recently,Houn was involved in vaccines regulation: she was deputy director of the Center for Biologics Evaluation and Research’s Office of Vaccines Research and Review. But she also knows a thing or two about drug reviews, having served in leadership positions of two different Offices of Drug Evaluation during her 15-year tenure at FDA.

For Celgene, Houn couldn’t come at a better time: the company is working to comply with the Risk Evaluation and Mitigation Strategies provision of the FDA Amendments Act. Celgene is responsible for two of the most restrictive REMS: thalidomide (Thalomid) and lenalidomide (Revlimid), a thalidomide analogue.

In deciding to leave FDA for industry, Houn is taking a page from her husband, former Office of Antimicrobial Drug Products director Mark Goldberger, who left in early 2007 for Abbott Labs. Other recent high-level departures from within the agency include former ODE II director Robert Meyer, who joined Merck in late 2007.

The Office of Drug Safety has probably had the hardest time holding onto talent. Predecessors to current director Gerald Dal Pan left for industry within a year or two of assuming the top drug safety post: Peter Honig to Merck as VP-risk management and Victor Raczkowski to Cephalon as VP-regulatory affairs.

Dal Pan is showing no signs of leaving anytime soon (and given the Office of Drug Safety's new powers and authority, why would he?). But given the monumental changes in drug regulation under the Amendments Act, FDA expertise is surely fetching quite a premium these days. For the agency's sake (and all of industry's), let's hope few other agency officials take advantage of it.

Entereg Approved at Last

Perspective is an amazing thing.

In June 2004, Adolor Corp. filed a new drug application for alvimopan (Entereg) for treatment of postoperative ileus. The product had "fast track" status, and Adolor and partner GlaxoSmithKline expected to launch the drug by the start of 2005.

What do you think they would have said if you had told them that the drug would not reach the market for four years, and then only with tough restrictions limiting access to the hospital setting and the course of therapy to two weeks or less? We try to keep our blog clean, so we won't speculate on the exact commentary that company executives might have offered.

In any event, here is what Adolor CEO Michael Dougherty did say during a conference call announcing the approval of the drug May 21: "This is such a big day for Adolor...Gaining approval of our lead product is a transforming event for our company. I cannot tell you how excited we are at Adolor."

And so Adolor joins the ranks of company's that are positively giddy at the prospect of becoming pioneers in the new drug safety era.

It joins a handful of other drugs approved by the agency under the new Risk Evaluation & Mitigation Strategy authorities that took effect March 25. (You can read more about the REMS pioneers in The RPM Report.)

Entereg is a precedent-setting new drug approval: the first new molecular entity approved by the agency with a formal, mandatory restriction on the setting of care in which it can be marketed. As part of the program, Adolor and GSK will have to monitor actual use of the drug and take corrective action if it is being used outside of hospitals or for longer than the 15-day therapy maxiumum.

It is surely a measure of how much the world has changed for drug development companies that the approval of Entereg, four years late and weighed down by those tough marketing restrictions, can still be greeted as a good news event. (Adolor shares jumped 10% in after market trading when the approval was announced May 20; profit takers and launch skeptics have brought it back down today.)

But it is also true that the REMS era is beginning about as well as it possibly could for the industry. Each of the first five products covered by the new authority is a drug that was stuck at FDA. The sponsors certainly didn't expect to find themselves bogged down by safety issues at the agency--but they also eagerly embraced the opportunity to become REMS pioneers as a way to get to the market at last.

The Fentora Rejection (Part II): Primacy of Postmarket Plans

Cephalon’s tough advisory committee review on May 6 for the expanded indication to non-cancer breakthrough pain for Fentora (fentanyl buccal tablets) illustrates the new realities of FDA's postmarket controls and the need for drug sponsors to present a clear picture of the future use for their medications–or face the reality that there won’t be future use.

Cephalon's drive for the Fentora added indication was rejected by the advisory committee; the company hopes to have another shot by working with FDA to effect an acceptable risk management program.

Cephalon went to the advisory committee well armed to defend the product 's use in a new patient population. The company had data on four Phase III studies in non-cancer breakthrough pain encompassing 941 patients with that type of pain.

The company pointed out, in fact, that a noticeable gap exists in approved treatments for this category of breakthrough pain; and, that prior to their development work, there was a paucity of studies specifically aimed at the indication. “To date,” the company told FDA, “no medication has been systematically evaluated in clinical studies or approved by the FDA for the management of breakthrough pain in patients with chronic persistent non-cancer-related pain.”

Yet, the combined FDA advisory committees (Anesthetic & Life Support Drugs and Drug Safety and Risk Management) did not want to hear about the clinical trials. They wanted to focus exclusively on the postmarketing controls for the product: current and proposed.

And when the committees looked closely at Cephalon’s postmarketing controls, they found Cephalon’s current controls wanting (permitting about 80% of current use to occur off-label). The committees further found recent and proposed improvements to postmarketing controls not convincing.

The focus on postmarketing controls (aka risk management/minimization plans) provides a clear picture of the extent of interest that FDA is likely to show about postmarketing plans for products coming to the agency for initial approval, for significant label extensions (like Fentora) and, in the near future, for approved products forced back to the agency after approval for postmarketing re-reviews.

According to FDA’s new authority from the FDA Amendments Act (FDAAA), the agency is scheduling specific dates for checking back on the success of post-marketing controls on approved products.

That’s part of the “evaluation” process in the new Risk Evaluation and Mitigation Strategies process called for by the new act--the next generation name for risk management programs. This form of re-review is essentially what happened in the case of Cephalon’s non-cancer pain indication, making Cephalon's experience a good advance lesson in what these look-backs will be like.

FDA has begun setting look-back deadlines for a number of recent approvals: GlaxoSmithKline’s Treximet, UCB’s Cimzia; Biovail’s Aplenzin, and a new indication for GSK’s Advair. (See “The REMS Era Begins: FDA Applies Soft Touch with New Drug Safety Tools”.)

These scheduled reviews of real-world experience with approved products generally will begin to occur about a year-and-a-half after approval. Mark your calendars: a lively season for these FDA look-back reviews on drugs is set to begin about the end of 2009, just when the next administration's FDA will be comfortable and settling in to full stride.

One of the scary points from Cephalon’s May 6 experience is that the company is not a novice in the risk management field. If any company should have been ready for an advisory committee focused on risk management. Cephalon should have been it.

The company has had experience with formal risk management plans for almost ten years since the approval of Actiq (fentanyl lozenge) in 1999. Cephalon even avows the mantra of risk management: that it is an ongoing and always changing process. Good risk management plans, according to that view and Cephalon's espousal of the language, entail controls and evaluation and then further controls and further evaluation. Good risk management is a repetitious process of refining and improving product control programs.

FDA described the analysis of Cephalon's risk management plans for Fentora as the clear focus of the May 6 meeting. The agency advised the Fentora committees that the key decision it was seeking was assurance that Cephalon had workable plans to “prevent, monitor and intervene” in cases of misuse or abuse.

Because the company already has first-generation risk management programs in place for Fentora, the discussion naturally turned to how those plans are working as well as how likely they will be to succeed with a larger pateint population.

Cephalon CEO Frank Baldino attempted to put the post-market focus of the May 6 advisory committee meeting in the best light possible. He maintained that the meeting focus on post-marketing controls indicated that the efficacy of Fentora is not an issue.

“I was very pleased,” Baldino said after the meeting, “that there was no discussion with the agency or even the panel for that matter regarding the registration studies that were submitted for approval. Clearly the designs of the studies were sufficient from a registration perspective.”

But as pleased as Baldino professed to be with the status of clinical work, the company faces an uphill climb to the new indication. And the rest of the industry should worry with Cephalon about that challenge, watch closely how Cephalon responds, and learn from it. (See “The New World for New Drug Approvals: Evolution in Strategies for Getting FDA Drug Approvals”).

Cephalon apparently could see problems coming in advance of the May 6 meeting and actually made some drastic last-minute revisions to its plans to demonstrate an increased seriousness and commitment to restricitng the use of Fentora.

In the weeks before the advisory committee meeting, the company cut back on the proposed physician market for the product substantially.

In briefing materials prepared well in advance of the meeting, Cephalon said it would commit to restrict detailing to about 17,000 physicians and limit promotions to 30,000. That would limit commercial efforts to doctors who specialize in serious pain management, the company said.

“These physicians regularly prescribe both long-acting and pure short-acting opioids, and treat a significant number of the subgroup of patients with chronic pain and breakthrough pain for whom Fentora would be indicated.” The company was ready to track the product, collect information and “ensure that growth is managed” for the first 18 months after approval of the expanded indication.

By the time of the meeting, however, the company was ready to tighten those restrictions. The company told the advisory committees that it would restrict detailing for one-year after the approval of the new indication to the 6,000 physicians who have already been prescribing the drug (to approximately 20,000 patients).

The company’s chief medical officer Lesley Russell made the commitment in a presentation on May 6. If, after a year, “no issues are identified, we will, in consultation with FDA, expand the detailing to an additional 6,000 patients and repeat the exercise. We will not expand the detailing of Fentora to beyond the maximum 30,000 physicians,” Russell said.

That’s a significant tightening of control over the product: one that would clearly make it tough for the company to meet previous predictions to the investment community about 15% growth for the product.

During a post-mortem conference call after the May 6 meeting, one analyst asked whether the company still had hopes for the 15% growth based on the advisory committee rejection. The tougher question is whether Cephalon could have produced the growth from the product if their voluntary restrictions are approved. Baldino skipped answering the status of previous growth projections and told the analyst that the company would be discussing the risk management plans and controls with FDA.

But even the eleventh-hour proposal to be more aggressive with its limitations on detailing and promotion was not immediately acceptable as a route to the expanded indication.

The problem: the company has not shown very much success to date controlling use of the product by those same 6,000 prescribing docs. Those are the docs who have been using the product off-label up to 80% of the time.

As part of its efforts to convince FDA to permit the extra indication, Cephalon also submitted a revised program called COVERS (Controlled Voice Enrollment Registration System) about one-week before the advisory committee. It was too late, however, in reaching the agency to get a thorough review by the advisory committee.

FDA took a harsh view of the company’s success with the initial risk minimization program from September 2006. “Based on our review of the post-marketing experience with Fentora,” the agency wrote in advance of the advisory committee meeting, “we do not believe the RiskMAP has been effective in minimizing the risks it was developed and implemented to minimize.”

FDA further does not feel that the company has followed up adequately on its original RiskMAP commitments. The company has “never submitted information that interventions and/or adjustments were proactively considered or instituted to address RiskMAP goal failures.”

Cephalon got a thorough review of its experience with Fentora because the company wanted to parlay off-label use into a new indication. One advisor to the company, University of Utah anesthesiology professor Perry Fine, MD, noted the high off-label use as evidence of the medical need and called the absence of the indication for non-cancer patients “not sustainable.”

The company, however, found out that the high off-label use can be a damaging piece of evidence if a prerequisite for getting FDA approval is actually showing that you can control your product in the postmarket.

That highlights at least one message that other sponsors should take from the initial Fentora rejection: be careful about using current use patterns as evidence for more favorable labeling. Those arguments can just as easily backfire.

There is a second, broader message: be prepared for FDA reviewers and advisory committees that are focused on the specifics of limiting real-world use of a product to proposed patient populations. Not every company will face it to the same extent as Cephalon; but every company should be aware of the new barrier to approval.