Saturday, September 20, 2008

Aztreonam Lysine decision by FDA, Research Note.

On September 16, 2008 Gilead (GILD) issued a press release stating the FDA review of "aztreonam lysine for inhalation, an investigational therapy in development for people with cystic fibrosis who have Pseudomonas aeruginosa (P. aeruginosa)," had been completed and the FDA said it "cannot approve the application in its current form and an additional clinical study will be required." See the press release FDA Complete Response Letter for Aztreonam Lysine.

This came as a bit of a surprise. All prior indications from Gilead were that the drug was safe and effective. Aztreonam Lysine was not expected to be a blockbuster because there just are not that many cystic fibrosis patients with P. Aeruginosa infections at any one time, although the number is by no means trivial. Other antibiotics are already available for this condition. The main reason to add Aztreonam as a treatment is the propensity of bacteria to develop immunity to antibiotic agents.

Financially it is not that big of a deal to Gilead, which is growing its HIV and Hepatitis franchise revenues at a rapid clip [See Gilead Should Rise on Penetration, Viread]. Still, money was spent on research, and approval would have meant an additional revenue stream. I am writing this blog because I was appalled by the poor coverage by the mainstream financial press. Also, mainstream articles almost never include links to more detailed data (because that might lessen ad revenue). I own Gilead stock, so I want to know, and see no reason not to share.

Progressing from the present, towards the past ...

On June 13th of this year, Gilead announced that a Phase III follow-up study showed Aztreonam to be safe when administered to cystic fibrosis patients [See Interim 12-Month Phase III Study Results for Aztreonam Lysine for Inhalation in Patients With Cystic Fibrosis]. This study, which was open-label [not double-blind], was done mainly to give a larger safety database for the drug. Patients showed improved respiratory symptoms and no evidence that the drug was unsafe. This was the third Phase III study.

On November 16, 2007, Gilead announced it had submitted its New Drug Application (NDA) to the FDA [See Gilead Submits New Drug Application to U.S. FDA for Aztreonam Lysine for Inhalation for Cystic Fibrosis]. Gilead said "The NDA is supported by data from two Phase III clinical studies (AIR-CF1 and AIR-CF2) and interim data from an ongoing open-label extension study (AIR-CF3) of patients who participated in AIR-CF1 or AIR-CF2. " Further "Data from AIR-CF1 demonstrated improvement in respiratory symptoms for people with cystic fibrosis," data from CF2 showed the therapy delayed the time needed before IV antibiotics needed to be started, and both studies showed the therapy increased patient respiratory functions. Common adverse reactions were listed, and said to be similar to those from placebos. In other words, there was every reason to get approval for the drug, and no reason for it to be rejected.

Going further back, on October 4, 2007, [See Gilead Announces Detailed Results of Phase III Study of Aztreonam Lysine for Inhalation in Patients With Cystic Fibrosis] details of the CF1 study were given. Again, it seems pretty good. The patient improvement is measurable, the p value is low (meaning it is highly likely the results would hold up if the trial were repeated, or done with more patients), hospitalization rates for treated patients were lower, and side effects were in line with those from placebos.

This was consistent with the May 29, 2007 press release "Gilead Announces Achievement of Primary Efficacy Endpoint in Second Phase III Study of Aztreonam Lysine for Inhalation in Patients With Cystic Fibrosis " Reaching the primary endpoint(s) for a clinical study, if the safety profile is good, is usually the main criteria for approving a drug.

You can go further back, but there does not seem to be any negative data on Aztreonam.

Probably the FDA just wants more data. The number of patients studied is not that large. On the other hand, the number of cystic fibrosis patients in the U.S. is typically around 30,000, and the number with Pseudomonas aeruginosa at any given time must be considerably smaller.

Gilead should tell the investment community exactly what the FDA said in rejecting the application. I don't see how keeping that secret can aid competitors. But it can aid us all in evaluating the value of Gilead as a company.

In biotechnology there is always the risk that a promising therapy will fail to be approved, and that established therapies may turn out to have risks that were not uncovered in clinical trials. I think Gilead is vastly undervalued by the market, but given the unknowns it is always best to ...

Keep diversified!

See also my Summaries of Gilead Analyst Conferences

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