Biotech General Discussion

Amp provides this deep dive into the following April 2021 spotlight catalyst, In order to assist subscribers in assessing this catalyst*:

What is the readout? FDA approval decision deadline date (PDUFA) intravenous (IV) tramadol for the treatment of postoperative pain

Timing (estimate) of readout: PDUFA date (FDA target deadline date) April 12, 2021

What is success?

Approval by the FDA

(Secondarily, completion of acquisition of FBIO’s affiliate ATXI by Invagen (now Cipla))

FBIO founded ATXI to develop an intravenous version of Tramadol, a patented intravenous formulation of the commonly prescribed, approved generic pain therapeutic, called Ultram among other names. FBIO owns a majority of the voting ATXI stock. In our view, this PDUFA is an especially complex catalyst, only for experienced biopharma investors with significant time to dig into the facts:

Bear/Bull Case:

Bear Case

• It is not clear how ATXI’s response to the NDA addresses the issue with opioid stacking1 unless the new label specifies that a rescue analgesic should not be another opioid, which may significantly negatively affect the future market potential of IV tramadol.

• Even if IV tramadol is approved, in this Covid pandemic world, the FDA might miss its PDUFA deadline and the April 30 deadline for the Invagent deal, the FDA might require a REMS post-approval program, or it’s label might be limited to specific surgeries, any of which would kill Invagen’s agreement to acquire ATXI.2

• Even if IV tramadol is approved by April 30 litigation between ATXI/FBIO and Invagen and its current owner (Cipla) appears to be a real possibility, as Invagen has indicated that because of the Covid pandemic, it’s deal to acquire ATXI is no longer enforceable.3

• Opioids have been extremely closely scrutinized by the FDA in recent years, with numerous approval failures.4

• Any future value of Contingent Value Rights (CVRs) if the Invagen acquisition is consummated, are too speculative because IV tramadol’s future sales are very difficult to predict at this time.

• FBIO receives an annual stock grant if ATXI continues in operation, which will significantly dilute other shareholders.

Bull Case

• This is a refiling to address specific issues that the FDA raised in its CRL rejecting the first NDA for IV Tramadol.1

• The FDA has approved at least some other opioid pain meds in recent years after CRL issues have been addressed.4

• Oral tramadol has been used for decades and appears significantly less addictive than many of the commonly used opioids.

• Related to the point above, IV tramadol meets the need of, and will become the first DEAE Schedule IV opioid (less addictive and restricted than other IV opioids, which are Schedule II (high abuse potential).

• The FDA appears to have no further safety and efficacy concerns than those raised in the CRL, and IV tramadol met its safety and efficacy key endpoints in Phase 3 testing.

• IV tramadol appears to be a good option for patients who need an IV bridge pain med (e.g. post surgery) before oral tramadol.5

• Contingent Value Rights to ATXI shareholders if Invagen acquisition is consummated provides upside for ATXI shareholders based on future IV tramadol sales.

For more details about this trial, see our IQ Card

Cites

1. Avenue stated that “[t]he NDA resubmission will incorporate revised language relating to the proposed product label and a report relating to terminal sterilization validation.” 12/17/20 Company Anticipates NDA Resubmission in February 2021. Avenue previously reported that the FDA NDA it received on Oct 12, 2020, indicated that “if a patient requires an analgesic between the first dose of IV tramadol and the onset of analgesia, a rescue analgesic would be needed. The likely choice would be another opioid, which would result in opioid “stacking” and increase the likelihood of opioid-related adverse effects. Other than this potential safety concern, the FDA did not identify a safety signal in Avenue’s clinical development program. In addition, the CRL stated that the FDA requires an adequate terminal sterilization validation prior to NDA approval, which is planned for later this quarter.”
   

2. “On November 12, 2018, we entered into the SPMA with InvaGen pursuant to which InvaGen agreed to purchase, for $35 million, common shares representing 33.3% of the fully diluted capitalization of the Company (the Stock Purchase Transaction) and subsequently acquire the remaining issued and outstanding capital stock of the Company for $180 million, subject to certain reductions, in a reverse subsidiary merger transaction (the Merger Transaction). Pursuant to the terms and subject to the conditions set forth in the SPMA, InvaGen will, at second closing, hold 100% of the issued and outstanding equity interests of the Company. Consummation of the Merger Transaction is conditioned upon, among other things, FDA approval of IV Tramadol by April 30, 2021, its labeling and scheduling and the absence of any Risk Evaluation and Mitigation Strategy restrictions in effect with respect to IV Tramadol, as well as the filing and expiration of any waiting period applicable to the acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which filing both parties completed on March 12, 2021.” Source: ATXI 2020 10K filed March 31, 2021 available at SEC.gov The requirement for a broad surgery label is indicated with the other conditions above in slide 21 of the ATXI slide deck available at ir.avenuetx.com on April 11, 2021.
   

3. Source: ATXI 2020 10K filed March 31, 2021 available at SEC.gov: “On November 12, 2018, we entered into a Stock Purchase and Merger Agreement (SPMA) with InvaGen Pharmaceuticals, Inc. (InvaGen), and Madison Pharmaceuticals Inc. (Merger Sub), pursuant to which we agreed to the sale of the Company in a two-stage transaction, the details of which are summarized below. Recently, InvaGen has communicated to us that it believes two Material Adverse Effects (as defined in the SPMA) have occurred, which raise substantial doubt as to whether or not the merger will be consummated. In October 2020, InvaGen communicated to us that it believes a Material Adverse Effect (as defined in the SPMA) has occurred due to the impact of the COVID-19 pandemic on potential commercialization and projected sales of IV Tramadol. Additionally, in connection with the resubmission of our NDA in February 2021 (details of which are below), InvaGen communicated to us that it believes the proposed label for IV Tramadol would also constitute a Material Adverse Effect on the purported basis that the proposed label under certain circumstances would make the product commercially unviable, and in addition that the indication that the FDA approves may fail to satisfy a condition precedent to InvaGen’s obligation to consummate the second stage closing of the SPMA. While we disagree with InvaGen’s assertions, it is possible InvaGen could attempt to avoid its obligation to consummate the merger, terminate the SPMA, and/or pursue monetary claims against us. Over the past several months, we have communicated with InvaGen relating to its assertions that Material Adverse Effects have occurred. Nevertheless, InvaGen has communicated to us its desire to consider all options on the proposed merger, including the option to not consummate the merger. As a result, the possible timing and likelihood of the completion of the merger are uncertain, and, accordingly, there can be no assurance that such transaction will be completed on the expected terms, anticipated schedule, or at all.”
   

4. NKTR-181 Program Cancelled Following FDA Committee Vote; See prior CRL for IV tramadol, ACRX’s DSUVIA, and TRVN’s OLINVYK. The latter 2 drugs were eventually approved.

5. ATXI 2020 From 10-K “Parenteral tramadol is approved and used for the management of postoperative acute pain throughout much of the world. Parenteral formulations include IV, intramuscular, or IM, and subcutaneous, or SC, formulations. Based on our review of IMS Health data from 2014 to 2016, we believe that parenteral tramadol accounts for approximately 10% of the total IV analgesics used in Europe. During the 10-year period from 2010 to 2019, approximately 370 million doses of parenteral tramadol was used in Europe, according to data from IQVIA (a 3rd party data provider). There is no parenteral formulation currently approved in the United States. We believe that the introduction of an IV formulation of tramadol in the United States will address many of the shortcomings of opioids, APAP and NSAIDs currently used in the postoperative setting. We administered IV Tramadol over approximately 15 minutes in our Phase 3 trials. We believe that our method of administration of IV Tramadol may provide significant benefits such as reduced side effects, compared to previously approved methods of administration of IV Tramadol in Europe, which is typically accomplished via a slow push over 2 to 3 minutes. In addition, our IV Tramadol dosing regimen produces a similar Cmax (maximal blood level) and AUC (overall systemic exposure) to those of oral tramadol at steady state, which we believe ensures an easy transition from IV to oral therapy in the post-surgical setting. Based on the trials done in Europe and on the data generated with oral tramadol, we believe that IV Tramadol, if approved, will be an attractive option for physicians who treat postoperative pain in the U.S., due to the following attributes: As an established analgesic, tramadol has documented efficacy and safety and physicians are already familiar with the drug. As a Schedule IV controlled substance, tramadol has less potential for addiction and abuse than other narcotics widely prescribed in the post-surgical setting. In the current environment where the opioid epidemic is a recognized problem in the United States and there are increasing restrictions on Schedule II opioids, a Schedule IV opioid such as tramadol may become a more attractive option. Importantly, there is a step-down therapy available for IV Tramadol. Patients are transitioned to oral therapy when they are discharged from the hospital or when they can tolerate oral medicine. Our IV Tramadol dosing regimen provides a similar PK profile to that of oral tramadol at steady state to ensure a smooth step-down process. We believe that IV Tramadol, if approved, will be a useful and effective tool in the management of acute postoperative pain. Its potential advantages compared to current standard-of-care agents, along with the known efficacy, safety and tolerability profile for oral tramadol support the use of IV Tramadol in this setting. We believe that the risks associated with the use of IV Tramadol will be benign compared to other opioids, and consistent with that of the currently marketed oral tramadol products. Consequently, with the industry trend toward multimodal therapy and away from Schedule II narcotics, we believe that, if approved, IV Tramadol’s unique profile could position it to become an invaluable part of a treating physician’s repertoire of available pharmaceutical options in the management of postoperative pain. Source

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