Biodel Faces Biotech Implosion on FDA CRL (BIOD)
Biodel Inc. (NASDAQ: BIOD) is the latest biotech to feel the pain of FDA denial. The company is seeings its shares crushed this morning after the FDA issued a Complete Response Letter, which means that an approval was denied.
The FDA Complete Response Letter was for Linjeta as an injection for the treatment of type 1 and type 2 diabetes to improve glycemic control.
What was disclosed is the the FDA has requested additional information, including comments related to clinical trials, as well as statistical analysis, chemistry, manufacturing, and on controls.
The FDA stated that the type 1 trial analysis over efficacy was not sufficient for establishing conclusive evidence of efficacy.
In the type 2 trial analysis, the FDA noted that non-inferiority was established in the complete population. The other side is that the FDA also noted that non-inferiority was not established in the intent-to-treat population, due to FDA’s not considering a modification of the statistical model.
As far as safety, the response pointed out that unequivocal non-inferiority needs to be achieved to compare the risk of hypoglycemia.
Here is the real problem. The FDA has requested that Biodel conduct two new phase III clinical trials using the commercial formulation, one in patients with type 1 diabetes and the other in patients with type 2 diabetes. The new tests under these guidelines are meant to establish safety efficacy and safety data.
Two new Phase III trials means that the prior data will have to be replaced with new trial data, and that means going back to the drawing board.
The company now has a market cap of roughly $42 million. At the June 30, 2010 cut-off, Biodel was down to $23.85 million in cash and short-term investments. If you go back to the September 30, 2009 annual balance sheet, that figure was over $54 million.
Biodel shares were down over 50% at $1.79 at the open this morning, and that marked a new 52-week low for the stock.
JON C. OGG
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