Shares of Chapel Hill drug developer Cempra stabilized Thursday after a week-long rout, as Cempra officials prepared to appear before a Food and Drug Administration advisory panel to seek approval for a pneumonia treatment the company has been developing for the past decade.
Cempra will defend its antibiotic drug, Solithera, on Friday, two days after FDA staffers issued their conclusions that the drug raises a potential risk of liver damage. After the staff raised concerns Wednesday, Cempra’s shares plummeted 61 percent and several analysts downgraded the company. Cempra shares have plunged from $23.44 last week, closing at $7.55 Thursday, up 25 cents.
“On Friday, it will be critical for Cempra to convince the panel that there is an immediate need for Solithera that merits the risks and uncertainties of approving the drug without additional clinical trials,” the Morgan Stanley research firm wrote in a research note.
Cempra has no drugs on the market and has spent more than $300 million developing solithromycin, which is to be market under the brand name Solithera, to address growing antibiotic resistance.
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WBB Securities analyst Steve Brozak said Thursday that the need for Solithera is becoming urgent and delaying its approval could result in preventable patient deaths. More than 55,000 people died from influenza and pneumonia in 2014, the most recent year for which data is available from the Centers for Disease Control and Prevention.
Cempra officials had ramped up hiring of sales representatives in anticipation of rapid FDA approval of the drug in December, in time for the 2017 flu season. But this week’s FDA staff analysis raises the possibility that Solithera might not be approved, or could be approved with restrictions that would limit sales.
“We had expected the FDA to focus on liver safety, but we were surprised by the degree of negativity,” the Gabelli & Co. research firm wrote in a report Thursday. “At best, the FDA’s stance implies significant labeling restrictions and post-market study obligations if Solithera is approved. At worst, the FDA could outright reject the drug ... and require additional clinical work that would likely kill further development.”
Cempra officials have long expressed confidence in the safety of solithromycin. Prabhavathi Fernandes, Cempra’s founder and CEO, told analysts in October 2015 that the drug had been recently given to a 2-week old baby that went home and was doing well.
The FDA staff said that solithromycin is effective in treating pneumonia, but noted safety concerns after analyzing data of 1,474 people who have taken the drug in clinical trials. Their report cited “a range of patterns of liver injury” associated with solithromycin usage. And they said that significant gaps in knowledge remain about the toxicity of the Cempra drug.
The staff said that 31.3percent of patients who received the intravenous version of solithromycin developed adverse reactions, none of them life-threatening, compared to 5.2 percent of patients who received an older antibiotic, moxifloxacin.
“We conclude that these findings comprise a genuine liver injury signal,” they wrote.
A supplemental analysis by FDA liver specialist Mark Avigan suggests testing solithromycin on 12,000 patients before it’s approved, a figure that Wall Street analysts said would mark the death knell for the drug. Avigan also suggests strongly considering label warnings and other restrictions if the drug is approved.
“The analysis by Dr. Mark Avigan and the patient level data regarding signs of hepatoxicity are likely to be center stage on Friday,” said Morgan Stanley’s research note.