Aimmune Therapeutics (AIMT) recently became the first drugmaker to warn investors about a new drug application delayed due to the ongoing shutdown. The details behind Aimmune's peanut allergy drug program and the decision by the Food and Drug Administration (FDA) not to begin a review are a little fuzzy, but one thing's clear: The FDA isn't beginning new reviews until the government reopens.
Bristol-Myers Squibb (BMY 1.30%) hasn't announced any delays for the experimental new drugs it intends to buy from Celgene (CELG) for $74 billion. There are a couple of important ones close to a review, though, that could be held up indefinitely.
Check out the latest Bristol-Myers Squibb and Celgene earnings call transcripts.
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While the government is shut down, the FDA can't accept the huge payments that come with new drug applications. That means the agency isn't accepting new applications, either.
1. AR101: More questions than answers
On Jan. 14, Aimmune told investors the FDA will not begin reviewing an application for its lead candidate AR101. The company claims the FDA indicated it would begin a review once the government reopens, but that's all we know for certain.
The FDA's commissioner, Scott Gottlieb M.D., didn't respond to Aimmune's statement directly. He tweeted a general response stating the agency would begin reviewing new drug applications submitted along with the standard $2.4 million PDUFA fee before the government shutdown on Dec. 22. Aimmune submitted its application and PDUFA fees on Dec. 21, which left a lot of investors scratching their heads.
Gottlieb added to the confusion by noting that reviews for most allergenic extract products have been paused because the FDA doesn't have enough user fees for these types of programs. Aimmune stressed that AR101 isn't an extract and that it's a complex biologic product.
Aimmune's description of AR101 is technically correct, but that doesn't change the fact that it's just concentrated peanut protein derived from real peanuts. A lot of people would call that an extract.
Perhaps the FDA characterized AR101 differently than Aimmune, or maybe someone forgot to sign the right forms. Whatever went wrong, it's going to delay the company's first drug launch indefinitely.
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2. Fedratinib: Did it go in?
On Jan. 7, Celgene told investors that it had submitted a new drug application for a potential new myelofibrosis treatment, fedratinib, and an approval decision was expected before the end of the year.
Celgene didn't tell investors exactly when it submitted the application or say that the FDA had started the review already. Until we hear more, it might be best to assume this potential blockbuster isn't going anywhere until the government reopens.
Fedratinib is similar to Jakafi, a myelofibrosis treatment that Incyte launched in 2011 that's expected to rack up $1.4 billion in sales this year. Jakafi isn't for everyone, and around half of myelofibrosis patients stop taking it within a few years.
Fedratinib helped patients resistant or intolerant to Jakafi show significant signs of improvement. That suggests it can climb even higher than Jakafi has if it earns an approval.
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3. Ozanimod: Another delay?
Bristol-Myers Squibb probably wouldn't have been able to afford Celgene if it hadn't been for the worst biotech blunder of 2018. Celgene shelled out $7.2 billion for Receptos to get its hands on ozanimod, but the New Jersey company didn't pay much attention to the Receptos team in California as they put together ozanimod's first application.
The FDA sent that application for the treatment of multiple sclerosis (MS) right back because pharmacology sections of the application weren't filled out. Celgene was planning to submit an updated application in the first quarter. Unfortunately, the FDA can't accept that application for review until the government reopens.
As an easy-to-swallow tablet, ozanimod was expected to generate more than $6 billion annually at its peak as a treatment for multiple sclerosis. While new oral treatments are generally popular, they're also far more expensive than generic versions of Copaxone, which have gained popularity during ozanimod's delay.
Peak sales estimates for ozanimod have been cut in half since the FDA returned Celgene's application. Hopefully, the shutdown won't delay this potential blockbuster drug any longer.
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Far and wide
A prolonged shutdown will probably cause a lot more trouble than holding up some new drug approvals. The FDA has also suspended the review of some investigational new drug applications, which are the sort that allows the industry to begin human proof-of-concept studies with early-stage candidates.
The FDA has also stopped accepting applications for new medical devices, and companies waiting for inspections before they can crank up expensive new facilities will just have to wait. Other executives waiting for meetings with regulators before they design and begin expensive clinical trials will probably have to wait, as well.
We may never be able to measure the harm the shutdown is inflicting on the biopharmaceutical industry. If it doesn't end soon, though, investors can be sure these companies will feel it on their bottom lines.
