Here we go again. Chelsea resubmitted Northera to FDA. This time, the approval filing includes data from another phase III study showing significant and meaningful reductions in dizziness and lightheadedness --- the FDA's preferred endpoint to measure clinical benefit in NOH patients. Chelsea still lacks data demonstrating durability of Northera's effect, but FDA appears willing to allow a post-approval trial to take care of this commitment.
FDA set Jan. 3, 2014 as the approval decision date for Northera. The agency also told Chelsea that it may bring the drug in front of a second advisory panel prior to making a final decision. The first panel voted in favor of Northera despite hairy data and an oppositional FDA. It's hard to envision a scenario under which a second panel -- presented with even more data confirming Northera benefit for NOH patients -- doesn't also vote to recommend approval.
I believe there's a 75% chance FDA approves Northera on the second go-around with Chelsea. The stock's current market value of less than $200 million does not fully account for the drug's approval and commercial market opportunity.
Jane P. emails:"Any thoughts on the current crop of biotech IPOs?" The biotech IPO market is on fire. The offerings are coming so fast, it's hard to keep up with all the new companies. Fierce Biotech's John Carroll does a nice job recapping the biotech IPO action so far this year. He also throws in a reality check: Up until this year, investors had been steering clear of biotech IPOs, leery of the kind of extraordinary risks associated with drug development work, where an unexpected glitch can wipe out a company's value in minutes. But a sudden influx of IPOs doesn't mean that investors have thrown caution to the wind. For every hot stock like Chimerix (CMRX), there was a company like Ambit (AMBI), which couldn't come close to its initial price range. Investors are still being choosy about what they like, and the long-term investors that helped create these companies are often seen coming in to make sure the IPO gets off on the right foot. I agree with John, although I'd say the party is raging to the point now where investors are definitely losing their inhibitions. Epizyme (EPZM) shares have almost tripled in value since the IPO in June. The company's market cap exceeds $1 billion even though none of its drugs have human clinical data yet. Just yesterday, OncoMed Pharmaceuticals (OMED) priced at $17, opened for trading at $27 and traded as high as $31. The offering was 10 times oversubscribed, from what I hear. I covered the dot-com IPO scene of the 1990s, so a lot of what I'm seeing today fills me with a dreadful sense of deja vu. Fundamentally, the biotech sector and this new crop of public companies are stronger than most anything that went public during the dot-com bubble, but still, the mania is a bit much.
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