A thoughtful and provocative piece by Matt Herper over at Forbes.
FDA Agreement Should Be Public
One of the biggest initiatives Margaret Hamburg has announced since she became head of the Food and Drug Administration is a new push to make FDA's doings more transparent to the outside world. Yesterday's bad news for Seattle-based Cell Therapeutics represents one way in which the regulator fails to make sure investors have information they need.
Cell Therapeutics (CTI) shares fell 40% to 60 cents yesterday after an briefing document prepared by the FDA raised multiple problems with the company's drug, pixantrone, and the quality of the clinical trials Cell Therapeutics is using to argue for its approval as a treatment for non-Hodgkin's Lymphoma. The biggest shocker, though, related to an agreement called a "special protocol assessment" which the company had told investors it had but which the FDA now says is no longer valid.
Special protocol assesments, or SPAs, are important for every drug company, from the tiniest fleaspeck biotechnology company all the way up to Pfizer. They are agreements between a company and the FDA that a clinical trial, if conducted as planned and successful, should produce enough data for a drug to be approved. This reassures companies that they are not going to pour $40 million into a late-stage study only to have the FDA say it did the wrong trial. SPAs also ease investor fears, helping smaller companies raise money.
Unfortunately, they are treated by FDA as confidential communications between the agency and companies. What is said to investors about the SPA is entirely up the the company. Between March 28, 2008, and September 16 2009, CTI reference the SPA in five press releases. But in the briefing documents released yesterday, the FDA stated: "On March 28, 2008, CTI notified the FDA of an early halt to enrollment for PIX301. The study was not stopped at a planned interim analysis and early study stopping invalidated the applicant’s Special Protocol Assessment." A CTI spokesman did not comment when asked why investors were not informed of this change.
This is not the first time this sort of thing has happened. In 2008, it was revealed at an FDA advisory committee meeting that GPC Biotech had misrepresented the SPA for its prostate cancer drug, causing shares to drop 60% in a day.
It might take an act of Congress to allow the FDA to make SPAs public, but that should happen. This would increase their value to biotechnology firms who are trying to raise money and prevent run-of-the-mill stock buyers from getting fleeced.
