Alimera Sciences, Inc. (NASDAQ: ALIM) is the latest of the drug implosions and this one looks even worse than just severely damaging. The FDA’s complete response letter is really a request for additional data. This is almost as bad as it could be, short of an outright rejection with an order of termination, for its diabetic macular edema (vision-loss for diabetics) drug candidate called ILUVIEN.
The reason the stock was down so much (almost 75%) is because we can’t see how the company can adequately fund the next trial and the next trial after that. One trial, maybe. Two, no way. The company had less than $39 million in cash on hand as of the end of September and its quarterly loss was $6.5 million in the last quarter even though its R&D expenses were lower.
This killed co-development partner pSivida Corporation (NASDAQ: PSDV) as well as the intravitreal insert was aimed at providing a therapeutic effect delivering a sustained release of the drug. pSivida was down 48% at $2.02 on the news as is supposed to get 20% of the profits. Alimera would have owed an additional milestone payment of $25 million to pSivida had ILUVIEN been approved.
We hate to see companies with drug candidates that are so needed fail. This is one of those cases where a new treatment could really come in use. Sadly, unless this drug has some very clear cut benefits on other indications, this could be the beginning of the end.
Alimera has only been public for a year and a half. Welcome to the biotech stock market. This stock fell 73% to $1.96 on Friday and it still has a $61 million market cap. A 73% drop is never a good thing unless you are a short seller. Alimera has a very tough road ahead.
JON C. OGG