forbes: Neurochem CEO: Odds Of Kiacta Approval 'Much Higher'
Peter Kang, 08.14.06, 3:25 PM ET
Shares of Neurochem jumped more than 15% in afternoon trading Monday on news the company received an "approvable letter" from federal health regulators for experimental drug Kiacta.
The Canadian biopharmaceutical firm said Friday evening the U.S. Food and Drug Administration delayed a decision on Kiacta, a treatment for a rare but deadly disease known as AA Amyloidosis, a precursor to kidney failure.
The agency requested additional efficacy and safety data which may require a new clinical trial. Investors shrugged off the news Monday and bought the stock, which has lost 33% year-to-date as of last Friday's closing price.
Neurochem (nasdaq: NRMX - news - people ) chief executive Francesco Bellini said in an interview with Forbes.com the FDA letter was "very, very good news."
Bellini, the former CEO and co-founder of BioChem Pharma, a Canadian biotech sold in 2001 to Shire Pharmaceuticals (nasdaq: SHPGY - news - people ) for $4 billion, said he never thought Kiacta would receive approval on the first try.
"Before, I always thought it would be 75% of the odds of approval," he said. "The FDA will decide but I think the odds of approval are higher, much higher."
Neurochem is co-developing the drug formerly known as Fibrillex with Centocor (other-otc: CNTO.PK - news - people ), a unit of U.S. healthcare giant Johnson & Johnson (nyse: JNJ - news - people ). Bellini said nothing in that relationship has changed.
Brian Lian of CIBC World Markets said the FDA delay was widely expected by Wall Street and likely pushes back a decision on the drug to the second quarter of 2007. "If Neurochem were to begin additional efficacy trials, we believe the next NDA submission date would be substantially later," he added.
But Bellini said he expects the resubmission process to take anywhere from three to seven months, with an FDA decision as early as Christmas. In addition, the Neurochem CEO expressed confidence U.S. health officials would not request a new trial. "I strongly believe that is not what the FDA thinks," he said.
Bellini added Neurochem would likely not conduct a new trial should the FDA request one. "If they want a new trial, I won't do it," he said. "Someone else will have to do it."
Neurochem's late-stage drug candidate Alzhemed remains the main focus for investors. Preliminary Phase III trial data for the experimental Alzheimer's disease treatment is expected in the second quarter of 2007.
"At a current market cap of $366 million, we believe the Street is only giving Alzhemed a one-in-four probability of approval," said CIBC's Lian. "We believe the drug is disproportionately discounted at these levels." |
