In what could be categorized as the silver lining in an otherwise black cloud for Swiss-based biotech Basilea, the FDA has issued a warning letter to Johnson&Johnson, 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.
The missive has potentially two paradoxical bits of good news for Basilea. First, it vindicates the biotech's decision to enter into arbitration against its partner in February 2009. Basilea is seeking damages - and, most critically, missed milestone payments - resulting from a string of delays to ceftobiprole's approval. Now it has FDA on record as also saying that J&J made significant mistakes in development.
Even with documentary support, arbitration is still a risky step to take; the partners in theory will be co-promoting the drug one day, and Basilea need things to go smoothly more than J&J does.
But the warning letter's second bit of paradoxical good news is that the citation itself may be a sign that things are smoothing out with the application, which received an "approvable" letter in March 2008.
Basilea and J&J submitted their complete response to FDA in November 2008, and the letter could signal that FDA has got its arms around the scope of the problem and the issue is essentially closed, as long as J&J continues the ongoing review and audit process it is having to carry out, using an independent assessor.
Analysts remain confident the drug (known as Zevtera) will be approved in the US and EU (it is already approved in Switzerland and marketed in Canada); the issue is when. Some sources expect an FDA decision in the first half of the new year--three years after the drug was filed. (That timing probably assumes arbitration proceedings are complete.) In Europe, the EMEA has done its GCP inspections and may report back later this year.
As far as Basilea's concerned, "we do not have any indication that the warning letter could change the agency's view on the approvability of ceftobiprole," a spokesman argues, pointing out that the regulator already knew about the concerns raised in the missive before it issued its complete response.
So perhaps 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.
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.
--Melanie Senior (m.senior@elsevier.com)
This article is reprinted from "The Pink Sheet" DAILY –Aug 19, 2009
Click here to start your 30-day, risk-free trial of "The Pink Sheet" DAILY – Immediate business intelligence from the company and product level up.
