Investors had high hopes when Impax (NASDAQ:IPXL) filed for FDA approval of IPX066, or Rytary, an extended release version of a common Parkinson's drug therapy, in 2011.
But manufacturing woes dashed the drug's chances for an FDA approval, and ultimately resulted in a divorce with Impax's partner on the drug, GlaxoSmithKline (NYSE:GSK)
Now, more than a year after the FDA rejected Rytary based on concerns over a key manufacturing plant, Impax is filing for Rytary's approval again. That's renewed interest in the company's shares, so let's take a closer look at Rytary.
Short of the goal line
Impax's first go-around with the FDA on Rytary was far from a success, but that wasn't Rytary's fault. In trials, patients treated with Rytary saw an improvement in off-time, a measure of how much time during the day they experience muscle-control-related Parkinson's symptoms.
In phase 3, Rytary patients experienced daytime off-time of 24%, or 3.8 hours. That matched up favorably against the placebo group, which experienced off-time 32% of the daytime, or 5.2 hours.
Since Rytary was a new long-lasting formulation of the commonly prescribed carbidopa-levodopa therapy, Impax and Glaxo, which signed on for ex-U.S. rights in 2010, felt Rytary had a good shot at winning away scripts from Sinemet and Parcopa, two common carbidopa-levodopa brands. But instead of an FDA green light, Rytary's first application was delayed, and then rejected in January 2013 over concerns regarding Impax's Hayward manufacturing plant.
A chance for redemption
In 2011, the FDA filed a warning letter outlining concerns it had with Impax's Hayward manufacturing facility. Since that facility had been involved in the production of Rytary during trials, Impax's inability to resolve the FDA's concerns at the plant ended up derailing Rytary's application.
In the FDA's complete response letter, which was sent to Impax in January 2013, the FDA informed Impax that Hayward would have to pass reinspection before it would approve the drug.
However, just two months later, Impax reported that the Hayward facility had failed that reinspection, effectively shelving Impax's ability to refile Rytary for approval. Impax's inability to address the FDA's concerns was even more glaring given that three of the 12 observations noted in the FDA's reinspection were repeats of issues previously noted prior to the 2011 warning letter.
Faced with a new and uncertain timeline, Glaxo opted out of its Rytary license. That meant Impax would no longer be eligible to receive up to $175 million in milestone payments from Glaxo tied to Rytary's commercialization. As a result, Impax laid-off more than 100 people -- most of whom were employed at Hayward -- in a bid to save money.
As of February, the FDA hadn't inspected the Hayward facility again, and work to get the facility up to snuff remained ongoing. While that revelation was disappointing, the company did, however, indicate that it was discussing the possibility of unbinding Rytary's approval from Hayward, given Rytary would be produced in Taiwan instead.
Whether the company's refiling of Rytary's application means that it has reached an agreement with the FDA to separate the two issues remains a question, but at a minimum, the filing suggests that Impax is increasingly confident it can get the FDA's nod this time.
Fool-worthy final thoughts
Sadly, Parkinson's is a challenging disease that has stumped drug developers. Given that more than 4 million people live with Parkinson's worldwide, and 60,000 people are diagnosed with the disease every year in the U.S.,there's clearly a need for new treatments like Rytary.
If approved, Rytary won't be the first drug to stumble at the FDA before eventually reaching the market. Earlier this year, Chelsea Therapeutics' (UNKNOWN:CHTP.DL) Northera finished a circuitous path to market that included an FDA rejection. Northera, a treatment that reduces fainting upon standing in patients with nervous system disorders like Parkinson's, finally got the nod in February.
If Rytary follows Northera's path, and wins approval, Impax will no longer be able to leverage Glaxo's global footprint overseas. That suggests it may be hunting for a new partner. If it can find one, it could prove material given Glaxo's prior willingness to pay milestones and double-digit royalties. That means investors should keep an eye on Impax.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.