Transitioning from making enough of a drug to treat patients in clinical trials to making enough of a drug to sell commercially can be tricky. Just ask Onyx Pharmaceuticals (Nasdaq: ONXX ) , which is down 3% today after management announced that the Food and Drug Administration wants more information on its updated manufacturing process for its multiple myeloma drug carfilzomib.
Changes made to the process while the company was scaling up will delay the plan to submit the drug to the FDA for an accelerated approval until mid-2011 at the earliest; Onyx had said it would submit it before the end of this year. A six-month delay and the resulting six-month loss of revenue isn't really the end of the world, but investors are -- rightfully in my opinion -- worried about the manufacturing of carfilzomib.
At the worst, the FDA could be concerned that the drugs manufactured under different conditions are dissimilar enough that the clinical trials run with the old drug aren't relevant to the "new" drug. Reverting back to the smaller scale usually isn't an option, which leaves proving that they function the same way through a small comparator clinical trial, which could push the application back even further.
At this point, Onyx hasn't said the FDA will require clinical trials -- a lot will depend on the changes, which Onyx characterizes as "minor variations" -- but there's plenty of precedent for the FDA being sticklers.
Eli Lilly (NYSE: LLY ) and Bristol-Myers Squibb (NYSE: BMY ) tried to get Erbitux approved to treat lung cancer using clinical trial data produced by their European partner, Merck KGaA. But the FDA balked because the drug used in the trial was the one produced by Merck KGaA, not the one sold stateside.
When Amylin Pharmaceuticals (Nasdaq: AMLN ) and Eli Lilly were preparing their marketing application for Bydureon, the FDA decided that they needed to run a clinical trial to prove the scaled-up production was the same as the drug used in clinical trials; fortunately, the companies had an ongoing trial where they were able to switch patients from the old drug to the new drug and show that it worked the same.
Finally, at the complete extreme, the FDA decided Genzyme's (Nasdaq: GENZ ) scaled-up version of Myozyme was so different that it made the company give the drug produced at the larger scale a different name: Lumizyme.
Unfortunately, unlike clinical trial data that are published in peer review journals, manufacturing is a black box for drug company investors. Be careful out there, Fools.
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