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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.

Christophe Bour­don

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.

Af­ter roller-coast­er week, CRL forces a reck­on­ing on Or­p­hazyme in­vestors — in­flat­ed shares plum­met
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