How Encysive Botched the FDA Game

Desperate Encysive investors felt like victims of a conspiracy. Meanwhile, Encysive itself clearly felt shortchanged.

"While our patience and our resources have been stretched and tested by the drawn-out course of this iterative process, because we believed that we were prevailing, we persevered," Given stated shortly before being replaced as Encysive's CEO this week. "We have successfully answered efficacy questions during the reviews of our regulatory submission by the European, Australian and Canadian regulatory authorities. [Moreover] we remain convinced that we adequately addressed the substantive item raised by the FDA in the second approvable letter, and we are deeply disturbed by [the agency's] decision."

History Lesson

Given its painful history, however, should Encysive be altogether surprised by its setback?

Just look at what happened to the company a decade ago. Encysive, operating in 1997 as Texas Biotechnology, reported strong phase III results for a blood-thinner suitable for patients intolerant of market-leading heparin. The company soon won a "priority review" from the FDA and started gearing up for fast-track approval of the drug.

But the following spring, in a stunning setback, Texas Biotechnology received a nonapprovable letter for its blood-thinner instead.

Texas Biotechnology responded in a manner that, to current Encysive shareholders, might seem eerily familiar. Originally, The Houston Chronicle reported, the company refused to disclose the reason behind the FDA's rejection. Only later did the company reveal that regulators wanted changes in the study design.