Updated from 12:27 p.m. EDT.
, publicly pining for partners and potential acquirers, instead got another regulatory delay on Monday as the Food and Drug administration wants a closer look at safety risks of its irregular heart rhythm drug.
Investors, who've long awaited approval for atrial fibrillation (AF) treatment vernakalant, pushed Cardiome's shares down $2.17, or 18.2%, to $9.78 after the FDA issued an "approvable" letter with data requests.
In order to approve the drug -- which is being co-developed with Japanese drugmaker
and goes by the brand name Kynapid -- the FDA is asking for safety information from all ongoing and completed studies on the treatment, regardless of what they are testing it for, the form of the drug, and what dose it is.
The FDA is concerned with serious adverse events in eight patients with compromised ventricular function. Regulators are asking Cardiome and Astellas for evidence in support of the drug's risk benefit profile in this population. Without such evidence, the FDA could decide to restrict the use in that subset on the drug's label.
Monday's letter could result in the need for an additional clinical study, although Cardiome said it was optimistic about its chances of addressing the issues with already-available data. The companies noted in a press release that they will meet with the FDA within the next few days, but anticipate it will take several months to put together an appropriate response.
Now, the earliest approval date possible is nine months from today, noted BMO Capital Markets' Chrstine Charette. She estimates that if an additional trial is required it will delay approval by at least 18 months.
Rodman and Renshaw's Michael King moved back his projection for the launch of Kynapid until the second half of 2009, and removed revenue -- including a $15 million milestone payment due from Astellas on approval -- from his model for the next twelve months. King maintained a market outperform rating, but lowered his price target to $11 from $15.
The companies filed for approval for intravenous vernakalant in December 2006. In December 2007, an FDA brief preceding an advisory committee meeting indicated concern over incidents of heart spasms, one of which was fatal, in addition to lack of data on the drug in patients with a history of heart problem. The advisory panel voted six to two to recommend approval of IV vernakalant.
The goal date for an FDA decision was Jan. 19, but a decision was postponed for reasons unknown.
In July, Cardiome announced positive phase IIb data from the oral version of the drug, sending shares up more than 28%. The company said then that it would move the oral version to late stage studies and reiterated its plan to find a development partner for the drug or an acquirer for the company as a whole.
Based on the Cardiome's cash position of $51 million at the end of the first quarter, Rodman and Renshaw's King believes the company will now likely need to raise additional capital before the approval of vernakalant, either through a partnership or through the capital markets.
BMO's Charette, who has a market perform rating and a $10 price target for the stock, says an acquirer might be harder to find given the most recent delay. "The FDA's concern with potential safety will not be well received by potential acquirers, especially given Cardiome's emphasis on the strong safety profile of the drug," she writes.
Last Friday, the FDA granted priority review to Sanofi Aventis' competing drug, Multaq. The "priority review" is designed to give drugs that offer major advances in treatment where no therapies exist.