What happened
Shares of Amylyx Pharmaceuticals (AMLX 1.12%), a clinical-stage biopharmaceutical company, are tanking in response to comments from the FDA regarding the company's lead candidate. The stock was down 53.7% at 11:49 a.m. ET on Monday.
So what
Amylyx has one new drug candidate in clinical-stage trials, a combination of sodium phenylbutyrate and taurusodiol tentatively named AMX0035. At the FDA's suggestion last year, the company submitted an application for AMX0035 that could make it a new treatment option for patients with amyotrophic lateral sclerosis (ALS).
ALS is a progressive neurodegenerative disorder that lacks treatment options. While some patients can survive more than a decade, the vast majority lose function in their limbs and then the ability to draw breath within a few years of their diagnosis.
Image source: Getty Images.
Amylyx completed a phase 2 trial that produced positive results and prompted the company to begin a larger phase 3 trial that is currently enrolling patients. Investors perked up last year when the FDA suggested the company submit a new drug application for AMX0035 without waiting for the results of its phase 3 study.
This morning, the FDA provided a briefing document for its upcoming meeting with an independent advisory committee regarding AMX005. The stock is tanking today because it turns out the FDA doesn't think the company has presented sufficient evidence of efficacy to warrant an approval yet.
Now what
The FDA will bring together a team of independent neurologists on Wednesday, March 30. They'll discuss whether the data from Amylyx's phase 2 trial provides substantial evidence of efficacy, and the answer will most likely be a resounding no.
The FDA pointed out to its advisory committee that while the phase 2 trial met its primary endpoint, the benefit is considered statistically significant by a very thin margin. The agency also raised serious concerns about the phase 2 trial itself. For example, none of the first 18 patients enrolled received a placebo even though the trial was supposed to be randomized. The agency even complained about the placebo used, because noticeable bitterness and gastrointestinal side effects could have effectively unblinded the study to participants and their physicians.
Regarding follow-on data from the study that the company touted as evidence of a long-term survival benefit, the agency said the findings weren't persuasive. With all these issues in mind, the odds of a speedy approval of AMX0035 before phase 3 data is available are exceedingly slim. It's probably best to avoid this biotech stock until Amylyx wraps up its phase 3 trial in 2024.
