Shares of ChemoCentryx (CCXI) are under pressure on Tuesday after the Food and Drug Administration posted Advisory Committee briefing documents for the company’s avacopan approval application. FDA staff highlighted areas of concern that raised "uncertainties about the interpretability" of the data and the "clinical meaningfulness" of results. While Piper Sandler analyst Edward Tenthoff sees the briefing documents raising "serious questions" about the trial design and analysis of avacopan's effect in treating ANCA-associated vasculitis, his peer at Stifel continues to believe in the "attractive profile" of the drug, backed by clinical data and "numerous" checks with key opinion leaders.
BRIEFING DOCUMENTS: The FDA has posted to its site the briefing documents for the May 6 meeting of the Arthritis Advisory Committee Meeting to discuss new drug application 214487, for avacopan oral capsules, submitted by ChemoCentryx for the treatment of anti-neutrophil cytoplasmic antibody-associated vasculitis. In the documents, FDA staff stated in part that, ChemoCentryx, submitted the results of a single Phase 3 study, CL010_168, and two phase 2 studies, CL002_168 and CL003_168. The focus of the AAC discussion will be data from Study CL010_168, also referred to as ADVOCATE, that compared avacopan to standard of care in patients with AAV; patients in both arms received a background of either rituximab or cyclophosphamide standard induction regimen. Study CL010_168 evaluated non-inferiority and superiority of avacopan compared to the control group at Week 26 and at Week 52. Complexities of the study design, as detailed in the briefing document, raise questions about the interpretability of the data to define a clinically meaningful benefit of avacopan and its role in the management of AAV.
"AAV is a rare and serious disease associated with high morbidity and mortality. It is also a disease with high unmet need for new therapies. Given these considerations, in principle, a single adequate and well-controlled study may be considered to establish substantial evidence of efficacy. However, in CL010_168, there are substantial uncertainties around the phase 3 study design and results, raising questions about the adequacy of this single trial to inform the benefit-risk assessment," the briefing document states.
The document goes on to say that "though statistical significance was observed for both noninferiority and superiority at Week 52 for the primary endpoint, it is not clear if the comparisons between the avacopan and prednisone arm beyond Week 26 are meaningful. Superiority of the avacopan arm over the prednisone arm was not achieved for remission at Week 26. Beyond the assessment of remission in the primary endpoint, the secondary endpoints provide limited information to support a treatment benefit of avacopan."
'SERIOUS QUESTIONS': The FDA briefing documents ahead of the advisory committee on Thursday raised "serious questions" about the Phase 3 ADVOCATE trial design and the analysis of avacopan's effect in treating ANCA-associated vasculitis, Piper Sandler analyst Edward Tenthoff told investors. The FDA questioned non-inferiority at week 26, use of glucocorticoid steroids in the avacopan arm, difference between Rituxan and cyclophosphamide controls, and differences in investigator versus adjudicated BVAS response at week 52, the analyst noted. Tenthoff believes it will depend how well ChemoCentryx argues these points on Thursday and whether the unmet need of ANCA-associated vasculitis patients justifies a positive vote and further evaluation in a post-approval study. He keeps an Overweight rating on the shares but says a negative panel vote and failure to gain FDA approval would impact his $80 price target and cause him to review his thesis.
Voicing a similar opinion, JPMorgan analyst Anupam Rama called the briefing documents "worse than expected," adding that the "negative tone/stance of the FDA documents is without a doubt concerning." A number of the points underscore FDA concerns on the clinical trial design for ADVOCATE and the interpretability of the data, Rama added. The analyst, whose Neutral rating on the shares had previously been a valuation call given shares were seen as near-to-fully valuing AAV success, now also has more fundamental concerns around the approvability of avacopan.
'OPTIMISTIC' DESPITE STRONG LANGUAGE: While Stifel analyst Dae Gon Ha acknowledged that the "strong language" in the FDA advisory committee briefing documents for its upcoming panel meeting on avacopan is compounding existing investor concerns, he continues to believe in the "attractive profile" of the drug, backed by clinical data and "numerous" checks with key opinion leaders. The analyst notes that the FDA "raises interesting questions" and that the agency's decision "will be difficult to diligence," but maintains his optimistic views on avacopan and keeps a Buy rating on ChemoCentryx shares.
The briefing documents posted by the FDA for the May 6 meeting to discuss the NDA for avacopan in ANCA vasculitis are "more critical" than expected and point to a "fairly high bar" being set for the ADVOCATE trial, Raymond James analyst Steven Seedhouse told investors in a research note of his own. The analyst pointed out that the FDA is questioning both efficacy and safety and the stock is "justifiably down," but he expects the committee to conclude in the end that benefits outweigh the risks.
PRICE ACTION: In afternoon trading, shares of ChemoCentryx have dropped almost 52% to $23.60.
ChemoCentryx
-21.19 (-43.46%)