FDA panel votes not to recommend Hyperion LTK system
Panel: Results not predictable or stable enough. Sunrise: We will press for approval, overcome Wall Street naysayers.
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August 15, 1999
GAITHERSBURG, Md. ? The Food and Drug Administration?s (FDA) Ophthalmic Devices Panel unanimously recommended that the agency not approve Sunrise?s Hyperion holmium laser treatment to correct between 0.75 D and 2.5 D of hyperopia because the clinical results showed too much regression.
Sunrise had applied to the FDA for approval of its noncontact holmium:YAG laser, which lays concentric circles of eight 25-æm deep laser spots at 6-mm and 7-mm diameters around the optical zone. The heat of the laser coagulates corneal collagen, which shrinks and thus steepens the central cornea.
Panel reviewers and FDA staff said that 6-month follow-up data showed that the refractive correction provided by the procedure was not sufficiently predictable. They recommended delaying approval until more long-term follow-up and data analysis are available. At question is the tendency for refractive results to regress.
The company reacted as aggressively to the panel vote as they have to recent attacks by stock market analysts and an accusatory story in The Wall Street Journal. Sunrise argues that the results with the Hyperion meet or exceed the refractive laser surgery standards set for the approval of photorefractive keratectomy, so they will persevere in obtaining FDA approval regardless of the panel recommendation. And despite rumors to the contrary, Sunrise says, the company is solvent and will see their product to market.
Backdrop of innuendo
The panel meeting convened the day after a news story disclosed the fact that ?Sunrise shares [are] held by experts testing product.? The July 21 Wall Street Journal story appeared under that headline in the ?Inside Track? column alongside a table titled ?Insider Trading Spotlight,? which listed the largest ? and completely legal ? insider trades disclosed to securities regulators from May through July. (No Sunrise transactions were on that list.) A more detailed story on the Sunrise stock holdings of clinical investigators had actually appeared on July 15 on the financial news Web site TheStreet.com.
In the Journal story, staff reporter Danielle Sessa referred to the upcoming FDA advisory panel meeting and wrote that ?one thing the members of the panel won?t necessarily hear is that at least seven of the 11 clinical investigators who performed the trials of the vision-correction system own stock in the Fremont, Calif., company.? A new FDA rule requiring disclosure of financial interests by clinical investigators went into effect after Sunrise filed its premarket approval (PMA) application, the article noted. According to a review of records filed with the Securities and Exchange Commission, Ms. Sessa said, two of the clinical investigators (David Brown, MD, and Alan Aker, MD) held a total of 4.11 million shares of Sunrise stock, worth ?nearly $70 million? at the time the article was written.
An unusual beginning
A. Ralph Rosenthal, MD, director of the FDA?s Division of Ophthalmic Devices, departed from the usual order of business by stating at the opening of the meeting that although the agency had received complaints that several of the Sunrise clinical investigators had financial interests in the company, it was not relevant to the evaluation of the PMA application. He said that the FDA had procedures in place to consider the effect of any investigator bias on clinical data and act upon it while studies are underway, while the PMA application is under review and even after premarket approval has been granted.
Sunrise clinical investigator Douglas Koch, MD, began the presentation of the Sunrise PMA application by describing the procedure.
Eyes to be treated with the laser are anesthetized with three drops of proparacaine delivered over several minutes, Dr. Koch said. The fellow eye is patched to prevent cross fixation, and a speculum holds open the treatment eye. Under current protocols, the eye is allowed to air dry for 3 minutes.
The patient fixates on a target, and the spots at the 6-mm radius are delivered in 1.4 seconds. The laser is reset at the 7-mm radius, and the second set of spots is created.
Clinical study results
Dr. Koch told the panel that 6-month follow-up was obtained on 596 eyes and 436 eyes had 1-year results.
Dr. Koch and R. Doyle Stulting, MD, told the advisory panel that they had excluded 50 eyes from the data analysis. In the early trials, surgeons let the eye dry for about a minute and then used a Weck-cel sponge to wipe it completely dry. Later, the technique of air-drying was found to give better surgical results, so the treatment protocol was changed.
According to Dr. Stulting, who presented the efficacy data from the clinical trial, 90% of eyes were within 1 D of the intended correction at 6 months. He noted that the FDA has required 75% of eyes to be within 1 D of intended correction in reviews of previous refractive laser PMAs. (Dr. Stulting is a former chair man of the ophthalmic devices panel.)
Ten percent of patients said they were dissatisfied because of undercorrection. Dr. Stulting said that retreatments are effective in such cases but were not permitted under the clinical study protocol.
Dr. Koch said that only 2.3% of laser thermokeratoplasty-treated (LTK) patients lost two lines of best spectacle-corrected visual acuity, while only 0.4% (two patients) lost more than two lines. Of that group, one patient had a cataract and the second patient dropped from 20/10 to 20/13.
?The preservation of best spectacle-corrected visual acuity is unparalleled,? Dr. Koch said, adding that all adverse events during the study were unrelated to the laser treatment.
?We are way, way below the FDA criteria,? for adverse effects, he said. ?There is no other surgical procedure with the excellent safety profile.?
Panel remained skeptical
Although the panel did not dispute the safety of the Hyperion, they did challenge the device?s efficacy. Two primary panel reviewers said the device was not approvable.
Panel reviewer Marian S. Macsai, MD, leveled the first criticisms of the data.
Reviewing nine tables of clinical study data, she noted that there was a decreasing number of patients whose visual acuity could be evaluated ? especially those who could be shown to have uncorrected visual acuity of 20/20 or better ? from the 6-month to the 24-month follow-up period.
Dr. Macsai noted that when only a low degree of refractive correction is attempted, coming within 1 D of the intended correction may not be sufficient. She said that she wanted to see follow-up of at least 2 years of data to establish if there is refractive drift resulting from the procedure.
The other panel reviewer, Michael R. Grimmett, MD, said that the lack of cycloplegic refractions was a problem.
All patients enrolled in the LTK study were 40 years of age or older, but ?residual accommodative reserve, if any, may skew results,? he said.
Dr. Grimmet said that the decreasing number of eyes available after 6 months eliminates the chance of making any conclusions about stability. He suggested that because continuous refractive shift occurs with time, ?most of the refractive effect is temporary?. The average consumer will want more than a temporary refractive effect.?
He interpreted this as poor efficacy and told the rest of the panel that the de vice was not approvable since it has not been shown to be effective. He also recommended the company submit another PMA application with more 2-year data.
Looking for more
The panel?s discussion of questions submitted by the FDA was concise.
The panel decided to focus on the data analysis that excluded early cases in which a Weck-cel sponge was used to dry the cornea. Because they were among the patients with the longest follow-up, however, the lack of data from those cases made the panel leery about recommending that the FDA approve the product.
The panel agreed that data should be resubmitted when follow-up of at least 24 months can be obtained in 90% of a group of 300 enrolled patients.
The FDA asked the panel about the 18.4% of treated eyes that had induced against-the-rule or oblique astigmatism of 1 D or more at 6 months. The panel was not too concerned about this as the follow-up data showed a decrease in induced astigmatism over time.
After dismissing a few other questions as moot based on the recommendation to obtain more data, the study sponsor was allowed to comment.
Dr. Koch said that data for the 90 eyes with 18 months of follow-up indicated that LTK visual acuity results were stable.
Dr. Stulting told the panel that the United States is years behind the rest of the world in treating refractive errors, and that international ophthalmologists cannot understand why the FDA would not approve a technology that has been used around the world with good results.
The panel then voted unanimously not to recommend the Hyperion for approval. They cited the lack of cycloplegic refraction data, the need to account for at least 90% of patients at the 24-month follow-up period, the problem with including the first 50 cases in the study, the need for an updated patient questionnaire and the lack of a data breakdown by gender.
?At further follow-up, we will be able to approve safety and efficacy,? Dr. Macsai said, among the concluding remarks.
Aftermath of the vote
In a conference call for stock analysts held the morning after the advisory pan el meeting, Dr. Stulting said, ?The pro cess that occurred yesterday was not a good one, at least in my opinion. During the discussion, the panel selectively quoted data and quoted data that was in accurate. They ignored data that they had in their hands as part of the discussion.?
Now, the company will work directly with the FDA staff on how to further seek approval for its laser, based upon the panel?s input. This will allow Sunrise a chance to address the panel?s concerns.
?Fortunately, the concerns and requirements are relatively easy to address and perhaps even easier to address than some of the conditions that may be attached to the approval recommendation,? Dr. Stulting said.
In these talks, the FDA staff will recognize the unfairness of some of the panel?s judgments, he added.
Donald Sanders, MD, PhD, director of the Center for Clinical Research, said in the same conference call that the drift seen after LTK with the Hyperion is virtually identical to that demonstrated by the excimer lasers made by six other companies.
?What [the panel] chose to ignore is all the other available technology has the identical issue to deal with. The FDA in a past submission with Visx chose to accept substantially less data with the same drift issue. They essentially set up a double standard for two competing technologies. That I believe the FDA has to address because they have repeatedly said that with new technologies they believe that it?s important to have what they call a level playing field.?
Market machinations
The period immediately before and after the advisory panel meeting was especially turbulent for Sunrise on the business side.
In ?A Special Report to Shareholders? issued June 16, Sunrise president and chief executive officer C. Russell Trenary III alluded to ?information from sources outside of the Company [that] has misled our shareholders.? The report called into question the reliability of some research reports about Sunrise.
The reports in question had been issued by Sturza?s Institutional Re search and Avalon Research, which Sunrise had taken to court the week that the report to shareholders was issued. Sunrise tried and failed to get an injunction forcing those companies to stop writing and distributing the reports, then sued them for defamation.
Internet vendetta?
Sunrise seemed to be a special target of the financial news Web site TheStreet.com. Starting as far back as Dec. 12, 1998, columnist Herb Greenberg raised questions about clinical investigators as well as Dr. Sanders? ownership of stock in Sunrise.
On July 15 senior writer Jesse Eisinger wrote that ?nine of 11 main investigators on Sunrise?s farsightedness laser have investments in the company.? An accompanying list showed nine ophthalmologists and the number of Sunrise common shares (ranging from 5,000 to 2,481,847) that they owned, citing a September 1998 SEC document as the source of the information. The majority of the article was devoted to the attention being given to Sunrise by short-sellers ? investors who position themselves to profit if a stock price drops. Accompanying that article was one explaining why short-sellers were taking that position on Sunrise.
In a July 19 story about Sunrise?s lawsuit over the negative analyst reports, the matter of stock ownership was raised again. This time it was ownership of stock by partners of Sunrise?s law firm that was culled from SEC documents.
Mr. Greenberg went back on the Sunrise beat July 22 (?Sunset on Sunrise?? read a subhead in his column that day) and followed up July 23 (?Sunset on Sunrise? Investors learn the hard way about hype?). Both stories related to an analyst who had just initiated coverage of Sunrise stock at a target price of 3« at a time the stock was selling in the low teens.
Wall St. fallout
NASDAQ suspended trading of Sunrise stock at the close of the market on July 22, although many on-line information services showed a false jump of the share price early the next afternoon to $32.375. In fact, the share price did not move until the opening of the market Friday morning.
And move it did. By the end of the day Friday, Sunrise stock had fallen from $15 to $3.7188 as 27 million shares were traded.
On July 26, The Wall Street Journal again mentioned the issue of investigators owning stock when it covered the FDA panel meeting and its effect on Sunrise?s stock price. It also quoted stock analyst Richard Leza ? the same analyst who had set a target price of $3.50 per share the previous week ? saying that the company would be ?out of cash at the end of the year.?
Sunrise quickly responded, posting a ?Frequently Asked Questions? statement on its Web site. Among other points, the statement said:
?[T]he Sunrise LTK system met or exceeded targeted endpoints set by the FDA in its existing guidance pronouncements. Our next step is that we will sit down with the FDA staff in Washington and begin to discuss and plan what the Company will need to do to get the process moving forward again.?
?The average [postoperative] visual acuity is 20/27 at 6 months, 20/27 at 12 months and 20/28 at 18 months. In addition, our data show that lessening of effect (regression) stopped at 20 months.?
?We will report our 2nd Quarter results from operations this coming week, and they will reflect a cash position in the neighborhood of $20 million?. We have the money to continue our work with the FDA, to conclude the development of our manufacturing processes and to expand the educational programs in the international ophthalmic community?.?
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