Bausch Health quickly revives FDA quest for ‘Significant 7’ hopeful Duobrii

The FDA has accepted Bausch Health's resubmission of an application for Duobrii, but analysts say the company's future remains in question. (Bausch Health)

When Bausch Health’s plaque psoriasis combo drug Duobrii was rejected by the FDA in June, analysts read it as a major setback for the company’s reboot plan. But after a meeting with the FDA, that hurdle could now be cleared ahead of schedule.

Bausch—previously Valeant—announced Wednesday that its resubmission had been accepted by the agency with a decision deadline now set for Feb. 15, 2019.

Duobrii is one of the “Significant Seven” the Canadian drugmaker is counting on as key growth drivers. Collectively, these seven drugs bear the mission of returning $1 billion in peak sales before 2023. That’s why analysts were so pessimistic about the company’s future when the FDA served Duobrii a complete response letter.

Chairman and CEO Joseph Papa put on a bold face, stressing at the time that the letter “did not specify any deficiencies related to the clinical efficacy or safety of Duobrii and no issues with CMC processes.” Instead, it noted questions regarding pharmacokinetic data over “the time course of drug absorption, distribution, metabolism and excretion and leads to things like the maximum concentration,” he specified on the company’s second-quarter earnings call earlier this month.

Despite management’s optimism, Wells Fargo analyst David Maris had estimated the additional data would take six months or more to collect. But Bausch resubmitted earlier, in mid-August, and said it believed it had answered the FDA’s questions. In a statement on Wednesday, Bill Humphries, president of Bausch’s Ortho Dermatologics unit, said the company remains “unwavering” in bringing the drug to the market.

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Though Bausch got its act together fast with Duobrii, analysts were still skeptical of a company growth plan that focused on new products instead of the M&A moves, price hikes and dubious marketing conduct Valeant relied on in the past.

Maris, for example, estimated Duobrii would never reach $100 million in peak sales as it is a combination of two generic drugs, for which managed care wouldn't offer favorable reimbursement. Not to mention the very slow uptake of Siliq, a “Significant Seven” drug that only raked in $4 million in the second quarter as it wrapped up a full year on the market.

Bausch hopes Duobrii and Siliq will help double dermatology revenue in the next five years, but Jefferies analyst David Steinberg said in a recent note to investors that it won’t be an easy task.

The Duobrii refile followed closely on the heels of an FDA nod for Bausch’s acne lotion Altreno, though that product isn't considered key. Next up, the FDA is scheduled to deliver a verdict in October for another member of the “Significant Seven,” topical steroid psoriasis drug Bryhali, which Bausch previously called Jemdel. Papa told investors on the second-quarter call that he doesn’t think Bryhali would face the same problems that Duobrii had before the FDA.