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Biotech Stock Mailbag: Amarin

I don’t fault investors for rewarding Delcath a little for the CE Mark grant, but I'd be much more concerned about the stateside regulatory status of Chemosat. I used to assume Chemosat approval by the U.S. Food and Drug Administration was a given, but now it seems to me that the risk of an FDA rejection is very real.

Delcath disclosed last week that FDA has asked to see hospitalization data from patients in all three Chemosat clinical trials -- phase I, phase II and phase III. Not only is Delcath being forced to compile far more safety data than previously disclosed, but the company also admitted needing to rewrite nearly the entire Chemostat new drug application.

Instead of refiling Chemosat with the FDA in September, as Delcath previously thought possible, the resubmission won't be ready until the end of the year. That means Chemosat's U.S. approval is delayed at least one year. Delcath originally filed for approval last December, which was followed in February by the FDA's refuse-to-file letter.

To allay investor fears, Delcath's Hobbs insists that FDA has not asked the company to conduct additional clinical trials. I believe him, but why would FDA ask for new clinical trials today when the agency hasn't even been provided sufficient safety data from the old clinical trials? Delcath screwed up by submitting a hugely deficient data package in the first place. As a result of its incompetence, Delcath wasted a year just getting to the FDA review starting line. Nothing prevents the FDA from asking for new clinical trials later on, after the agency's reviewers get a look at the data that Delcath should have submitted long ago.

It's not like Delcath has a hugely compelling benefit profile to brag about. In the phase III study, Chemosat treatment delayed the progression of tumors in the liver compared to patients treated with best supportive care. However, Chemosat did not help patients live longer than the control patients. On the risk side, five Chemosat patients died because of the Chemosat procedure, according to the investigators of the phase III study.
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