FDA delays verdict on Allergan's Esmya as European liver safety review pends

With European regulators investigating Esmya for liver safety, across the pond, the FDA told Allergan on Wednesday that it would need some more time to examine a new drug application for the product.

The agency has pushed back its review deadline by three months, with a decision on the uterine fibroids candidate now due in August instead of May. The way analysts see it, the switch “now likely gives the FDA additional time to complete their own analysis,” Credit Suisse’s Vamil Divan, M.D., wrote to clients on Wednesday.

The move was “not surprising,” considering the ongoing probe from the European Medicines Agency’s Pharmacovigilance Risk Assessment Committee, RBC Capital Markets analyst Randall Stanicky wrote in his own note to clients. PRAC launched its review of the therapy—marketed by Hungary’s Gedeon Richter in Europe—back in December after cases of serious liver damage turned up among patients. To date, there have been five, with four ending in liver transplantation, according to Divan.

PRAC followed up earlier this month, advising that no new patients start treatment with Esmya “for the time being,” adding that patients who have already wrapped up one course of treatment should hold off on starting a new one.

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Allergan, for its part, has said it’s confident the review won’t impact its chances of FDA approval. “We continue to believe that the totality of the data for Esmya supports a positive benefit-risk profile. The FDA will make an independent decision based on all the available data,” a spokeswoman said earlier this month.

But investors aren’t so sure. “Street expectations have already come down meaningfully on the back of prior announcements (we think buyside peak below $500 million and some well below),” Stanicky wrote. And he’s guessing Allergan has tweaked its own internal forecast of $1 billion to $2 billion in Esmya sales downward, too.

Meanwhile, the FDA delay wasn’t the only bad news Allergan got on Wednesday. Generics giant Mylan also announced it had teamed up with Revance—which is developing a would-be rival to Allergan blockbuster Botox—to produce a cheaper biosimilar version of the best-selling toxin.

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The way Wells Fargo analyst David Maris sees it, the move from Revance was a puzzling one. “It would seem to us that if one is hoping to bring a long-acting product onto the market with a premium price, then gutting the reference price product with a biosimilar could only serve to hurt the long-acting pricing environment,” he wrote in a research note.

And while Maris sees the partnership as little more than “unwanted noise” for Allergan, he acknowledged that convincing already wary shareholders not to panic would be a different story.

“While we think this news is more of a corporate rivalry and less a near-term commercial threat, it is likely to be another overhang for the shares,” he said.