Wednesday, August 19, 2009

Basilea Vindicated: FDA Warns J&J over Trial Conduct

In what could almost be categorized as the silver lining in an otherwise black cloud for Basilea, the FDA has issued a warning letter to J&J, the biotech's partner on Phase III anti-infective ceftobiprole. The letter--dated Aug 10--lists a range of concerns over J&J's trial conduct and site monitoring, including failure to follow study protocol.

It's a damning--and, frankly, embarrassing--indictment of the Big Pharma. Right up front, the letter declares [our bolding]:

From our review of the establishment inspection report and the documents submitted with that report, and your letter written in response to the Form FDA 483, dated June 24, 2008, and your responses dated September 2, 2008 and September 4, 2008 in response to additional information requests from the FDA, we conclude that you did not adhere to the applicable statutory requirements and FDA regulations governing the conduct of clinical investigations."

The letter strongly vindicates Basilea's February 2009 decision to enter into arbitration against its partner, however. What may have looked like a rather unwise move for the biotech back then (after all, who is going to run out of money/time first?) now seems justified.

Basilea's seeking damages--and, most critically, missed milestone payments--resulting from a string of delays to ceftobiprole's approval. It had long claimed that J&J was doing a shoddy job of developing the drug, and various FDA red flags along the way--including an approvable letter in March 2008 that was "subject to clinical site inspections" seemed to back up its view (Arbitration is still a big and risky step to take; these partners in theory will be co-promoting the drug one day).

Now granted, this warning letter relates to issues raised last year, before the partners submitted their complete response to FDA in November 2008. So there's nothing new in it, and, according to Piper Jaffray analyst Richard Parkes, it's unlikely to affect the ongoing review and audit process that J&J is having to carry out, using an independent assessor.

Whether or not that's the case, the letter is an undeniably useful piece of evidence for Basilea in its arbitration proceedings; a "significant positive", according to Parkes.

Basilea's hardly out of the woods, though. Arbitration's cheaper and faster than going to court, but it can still take years--certainly Basilea isn't expecting a decision this year. Meanwhile the patent-clock on ceftobiprole is ticking (first patents expire in the US in 2019) and the longer it ticks before the drug gets to market, the less interested J&J may be in investing in it.

Parkes still reckons ceftobiprole (known as Zevtera) will be approved for its cSSSI indication, but it won't be before next year at the very best--three years after the drug was filed. (And that probably assumes arbitration proceedings are complete.) In Europe, the EMEA has done its GCP inspections and may report back later this year.

FDA may wish to make an example of J&J on this issue by further delaying the drug's approval; warning letters to Big Pharma on quality assurance are rare, after all. But"we do not have any indication that the warning letter could change the agency's view on the approvability of ceftobiprole," argues a Basilea spokesman, pointing out that the regulator already knew about the concerns raised in the missive before it issued its complete response. (Furthermore, the FDA division that inspects how trials are done isn't the same lot that reviews drugs.)

Perhaps more likely, the letter signals that FDA has got its arms around the scope of the problem and the issue is as good as closed (granted of course that J&J doesn't mess up again).

So maybe the clouds will clear in 2010 for Basilea: maybe the FDA letter will mean it wins the arbitration and secures better-than-expected damages, and just maybe Zevtera will get past the regulators--some sources expect an FDA decision in the first half of the new year.

Or maybe J&J will decide the time is right to buy itself out of any future embarrassment or trouble and snap up the biotech--probably cheaply.


Anonymous said...

What do you mean there is nothing new in the warning letter? While the deficiencies in the letter were previously identified by FDA, what appears to be new is that FDA considered JnJ's response to be entirely inadequate, if not severely troubling. Further, the implication from the letter is that there is a systematic deficiency or lack of competence for JnJ's clinical monitoring. The company's inability to correct, much less recognize significant deficiencies (even after they were told to look into them and respond to FDA) appears to be an important (and new) revelation.

Danny Smith said...

Sorry if I'm missing something, but if the drug's in review, isn't the patent clock NOT ticking?

Melanie Senior said...

To Danny Smith: Ceftobiprole is approved in Switzerland and marketed in Canada. Basilea would argue that the drug has been under review at FDA/EMEA for longer than it might have been...

To Anonymous: my meaning is that no new deficiencies were uncovered; we knew from various back-and-forths between J&J and FDA that the pharma wasn't up to scratch. You raise a fair point, though, that the extent of the systemic problems is new (to us) and indeed the fact that FDA actually went and inspected 'the establishement' (eg J&J's own processes, not just the CRO sites) is unusual. It looks very bad, frankly.

Unknown said...

Danny, maybe I'm the one missing something, but my understanding is the patent clock is ticking from the moment the patent is approved (or submitted, can never remember which one). There are guaranteed exclusivity periods for certain types of drugs, and these start after approval, but they are separate from patents.