Agile Therapeutics, Inc. (NASDAQ:AGRX) is drawing close to an important milestone as the PDUFA date for its Twirla drug candidate is now right around the corner. The Food and Drug Administration is scheduled to announce its decision on February 16th. The FDA was earlier supposed to pass the verdict on November 16, 2019, but it was later extended to the current date. Twirla, a contraceptive patch, has gone through a long regulatory cycle and is now expected to reach a positive conclusion.

The long history of Twirla includes its first NDA submission in 2012. After the first debacle, the company had to resubmit the NDA in 2017. Both the submissions were met with Complete Response Letters (CRLs) by the FDA. The latter noted the issues related to the manufacturing process adopted by the company while clinical in-vivo adhesion properties of the company were also critiqued. The FDA also recommended additional pregnancies statistics to be considered for calculating the Pearl Index for the patch.

The latest submission for Twirla was done in the second quarter of 2019 and the application was supported by the data obtained from the comparative wear study concluded in February 2019. The resubmission also provided information about manufacturing process for the patch and addressed other concerns mentioned in the 2017 CRL.

The scenario looks positive, but still a little mixed for Twirla. Following the 2019 submission, the FDA conducted a meeting with the Bone, Reproductive, and Urologic Drugs Advisory Committee. The meeting concluded with positive response for the drug as it voted 14 to 1, with 1 abstention, in favor of the drug. However, the meeting was preceded by largely negative briefing documents issued by the agency. These documents raised concerns regarding the approval potential of Twirla.

Agile has taken a long route to reach this point. The delay in PDUFA date gave negative signals to the market, however, the extension may also be seen in a positive light. The FDA does not have any obligation to follow the advice issued by its advisory committees, but the general practice is to follow the lead of such committees. Further, the FDA had stated that the major reason behind the PDUFA extension was that the agency needed additional time to review the documents.

In the case of the patch receiving the positive response, it is likely that sales will peak at the $970 million mark, the estimate provided by the company in 2014. While the product has higher chances of getting approval, it is likely that the approval may come tagged with additional black box warning or a label contraindication. However, even in such a scenario, the drug is expected to perform well in the market and boost the company’s top and bottom line.

There are several likely outcomes of the drug approval. While the company is currently considering fortifying its sales force for the potential market launch of the patch, there are also whispers about the likely buyout or a significant alliance, which may help boost the stock price. Agile recently announced the appointment of its new VP of market access while making a couple of other appointments in finance and marketing divisions, revamping its leadership cadres.

Agile stock has performed extremely well in the market in the past 12 months, posting over 200 percent return. While the stock has the potential to retain the upward trajectory following the likely approval of Twirla, the negative results may lead to swift decline in the price level. While, at the current point of time, the stock seems good for investors with a strong risk appetite, it should be noted that investments in pre-approval biotechnology stocks always come with the potential of permanent capital erosion.

Achillion Pharmaceuticals and Alexion Merger Moves Forward

Achillion Pharmaceuticals (NASDAQ:ACHN) stock shot up as the company announced receiving a positive communiqué from the Federal Trade Commission. The FTC has granted the company early termination of the HSR waiting period with regard to its acquisition by Alexion Pharmaceuticals (NASDAQ:ALXN). The deal was ratified by Achillion shareholders on December 19 through a special meeting recommending a $6.30 per share bid.

Achillion and Alexion had announced the deal on October 16, 2019, valued at $930 million. It also had the provision for additional consideration in case of the company meeting certain regulatory and clinical milestones within a set time period. Such additional consideration is payable in the form of non-tradeable contingent value rights. The clause included $1.00 per share for ACH-5228 Phase 3 initiation and $1.00 per share for the U.S. FDA approval of danicopan.

Both the companies expect the deal to be fulfilled during the first half of 2020. The HSR waiting period is applicable under the modified Hart-Scott-Rodino Antitrust Improvements Act of 1976. The companies have a couple of drug candidates working in overlapping areas. Achillion is currently focused on developing all small-molecule factor D inhibitors in conditions such as paroxysmal nocturnal hemoglobinuria, where Alexion is also quite active. Achillion is targeting C3 glomerulopathy.

However, Alexion is confident that the merger will make its portfolio more diverse.

Bayer Cuts Further Stake in CRISPR

Bayer (OTCPK:BAYRY) announced that it has diluted its stake in gene editor CRISPR Therapeutics (NASDAQ:CRSP) to 6.1 percent. The company earlier held 7.2 percent stake in CRISPR with nearly 3.7 million shares. Bayer sold 632,105 shares during the period of January 9 and January 17. Bayer has been consistently cutting down its tie up with CRISPR. The companies had joined hands in 2016 to form Casebia Therapeutics.

In late 2019, Bayer took a step back stating Casebia “would operate under the direct management of CRISPR Therapeutics” and “would focus on the development of its lead programs in hemophilia, ophthalmology and autoimmune diseases.” However, Bayer still holds the opt in rights for two drug candidates at IND submission. CRISPR Therapeutics had joined hands with Vertex (NASDAQ:VRTX) to sponsor a human trial involving gene editing technology. The trial will be conducted at a single site in Germany and will involve testing a gene therapy in patients suffering from beta thalassemia.

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Disclosure: I am/we are long AGRX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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