The meme stock party is over for Orphazyme.
After a week of frenzied trading — where its shares skyrocketed, at one point, more than 1000% for no apparent reason — the Copenhagen-based biotech disclosed early Friday that the FDA has rejected its lead drug as a treatment for Niemann-Pick disease type C, asking for more data.
Shares $ORPH plummeted 56.39% to $6.35 — and it will likely face an uphill battle finding its way back up.
Orphazyme had to push past a Phase II/III failure to file arimoclomol with regulators. While the molecule — which they call a heat shock protein amplifier — had missed the primary endpoints, execs highlighted some positive subgroup analysis.
But it was clearly far from enough to cut it at the FDA.
Both of those primary endpoints involved rating scales: One is a disease-specific measure dubbed the NPC Clinical Severity Scale, while the other was a self-rating tool known as Clinical Global Impression of Improvement. According to the company, regulators took serious issue with the former.
The FDA issued the CRL based on needing additional qualitative and quantitative evidence to further substantiate the validity and interpretation of the 5-domain NPC Clinical Severity Scale (NPCCSS) and, in particular, the swallow domain. Further, the FDA noted in the CRL that additional data are needed to bolster confirmatory evidence beyond the single phase 2/3 clinical trial to support the benefit-risk assessment of the NDA.
While exploring the “potential path forward,” CEO Christophe Bourdon says they will now focus on pursuing an EMA approval, which would come early next year if a committee within the European agency gives its thumbs up in Q4.
“In the short-term, we will need to reduce our costs substantially and freeze all company efforts not related to clinical and regulatory activities to support approval for NPC,” he added.
NPC, which is characterized by an inability to transport cholesterol and other lipids in and out of cells, is not the only serious disease that Orphazyme had been going after. But their luck was not any better in those other areas, as arimoclomol has flunked pivotal trials in the rare muscle-wasting disease inclusion body myositis as well as amyotrophic lateral sclerosis, leaving a shadow on its “pipeline in a product” dream.