Ariad's future uncertain after leukemia drug sales halted
WASHINGTON (Reuters) - Ariad Pharmaceuticals Inc (ARIA.O) has suspended sales of its leukemia drug Iclusig after an investigation by the U.S. Food and Drug Administration found that a significant number of patients developed life-threatening blood clots or narrowing of the veins.
Iclusig is Ariad's only approved drug, and the company's shares fell 44 percent on Thursday. The shares have fallen nearly 90 percent since October 9, when the company said the FDA had placed a partial hold on clinical trials of the drug due to safety concerns.
Iclusig was approved on an accelerated basis last December to treat chronic myeloid leukemia (CML) and Philadelphia chromosome positive acute lymphoblastic leukemia in patients who had failed to respond to at least one other drug.
Ariad had hoped to expand use of the drug to patients who had not previously received therapy, and it was testing the drug against Novartis AG's (NOVN.VX) Gleevec. On October 18 it said it would discontinue that trial.
The FDA said in a statement that 24 percent of patients in a clinical trial known as PACE, on which approval was based, had experienced serious side effects, including fatal and life-threatening heart attacks, stroke, and a loss of blood flow to the heart and brain that required surgical intervention.
Further analysis of patients from an earlier trial showed that 48 percent experienced serious side effects. The drug had been approved on the understanding that further testing and analysis would be carried out. That analysis showed the drug's risks are higher that first thought.
"At one time we thought the drug had a favorable risk-benefit profile," Dr. Richard Pazdur, head of the FDA's cancer division, said in an interview. "Now we have to be realistic and say that no longer exists."
Pazdur said the FDA is working with Ariad to see if there might be ways to mitigate the risks associated with the drug, perhaps by altering the dosing, initiating a risk management program or limiting the drug to a subset of patients who have a specific genetic mutation or patients who have exhausted all other therapies.
But there are no guarantees the drug will be returned to the market at all, he said.
"We have to see what the data holds," he said. "Any consideration of what we do has to put patient safety first. This is not about getting the drug back to the market so the company can do well."
In the meantime, patients who are currently taking the drug and responding well to it can remain on it under a special, tightly supervised program, the FDA said.
Ariad said on a conference call with investors that the FDA might ask for new trials of the drug. Pazdur said it has not asked for new trials so far but does not rule them out.
He declined to say whether the FDA would call an advisory panel of outside experts to discuss the drug.
"PRECARIOUS CASH POSITION"
Ariad is now under fire from many sides. It faces multiple lawsuits over its handling of Iclusig. Earlier this week the activist investment firm Sarissa Capital Management LP took a 6.22 percent stake in the company and made clear it intends to challenge the board and management.
Sarissa is run by Alexander Denner, a former top deputy of billionaire activist Carl Icahn, and Richard Mulligan, a genetics professor at Harvard Medical School. The two worked together on several high-profile proxy battles for Icahn, including ImClone Systems and Biogen Idec Inc(BIIB.O).
Denner was not immediately available for comment.
Some analysts still see a future for Ariad, albeit an attenuated one. Cory Kasimov, an analyst at J.P. Morgan, said he expects Iclusig to return to the market in patients with CML who carry a genetic mutation known as t3151 for whom nothing else works and under a very strict risk management program.
It is also possible, Kasimov said in a research note, that in the long run Ariad's other drug candidate, AP26113 for a certain type of lung cancer, could justify a higher share price on its own.
"Nevertheless," he said, "with a new shoe seemingly dropping every week, increasing uncertainty around Iclusig's future, and an increasingly precarious cash position, we'd prefer to remain on the sidelines and allow some dust to settle."
Iclusig, which was also being developed for lung cancer, gastrointestinal tumors and thyroid cancer, was expected to generate sales of about $821 million by 2018, according to Thomson Reuters data. It had sales of $13.9 million in the quarter ended June 30.
Over the past decade the FDA has introduced a variety of mechanisms to speed new drugs to the market. Under the accelerated review program, a drug that shows early promise for a serious disease may be approved before it is fully clear that it confers a meaningful benefit in reducing symptoms or prolonging life. Further study is a condition of approval.
But some critics argue that companies often fail to complete the required follow-up analysis. A study published recently in JAMA Internal Medicine noted that of 20 new drugs approved in 2008, the FDA required 85 follow-up trials to monitor for safety. By 2013, only 40 percent of those studies had been completed.
Pazdur said the Ariad case shows that the system is working as it is should. A drug that showed some promise in patients who are resistant to other therapies was made available, yet quickly restricted as further information became available.
"We have heard repeatedly from patient groups and healthcare professionals that when it comes to life-threatening diseases there is a willingness to accept a greater level of uncertainty," he said.
Ariad's shares closed down 44.4 percent at $2.20 on Nasdaq, after earlier hitting a more than 3-1/2-year low of $2.15.
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