Question: Who is supposed to benefit from “breakthrough designations?”
(Breakthrough status was created in the 2012 FDA Safety and Innovation Act as a way of speeding development of products showing a dramatic improvement over existing therapies.)
Well, as is so often the case, where you stand on this question depends on where you sit.
If you sit in Congress or at the FDA, the first and most important answer is patients.
If you sit in a boardroom the first answer is likely to be stockholders.
Both answers are important -- but which is more important?
The question is, where lies the real value of a breakthrough designation? There can be more than one winner – but there must be a primary focus.
According to the Pink Sheet, As the number of sponsors holding breakthrough designations grows, so are the questions from analysts and investors about the value of the emerging program.
Several companies were questioned during their first quarter earnings calls about the value of the designation and its potential impact on the associated products. However, company officials did not have much to say about the effects it could have on a development program.
Merck & Co. Inc. announced it had received a breakthrough designation for its anti-PD1 antibody lambrolizumab (for treatment of advanced malignant melanoma) on April 24.
On May 2, Bernstein Research analyst Tim Anderson observed that Merck officials “did not provide clear answers” about what breakthrough means and “in our view, this designation does not actually mean much.”
To patients? No. To investors. Now, to be fair, that’s their business. But it sounds awfully cold.
Leerink Swann analyst Seamus Fernandez, who also asked about the breakthrough program during the call, concluded that the designation has no real downstream value – stating that the Merck breakthrough announcement “on its own has no impact on our expectations for relative anti-PD1 market share across multiple tumor types.”
“Downstream value?” For who? A new therapy for advanced malignant melanoma has plenty of value … to patients.
The Pink Sheet: While the ultimate value of the designation has yet to be tested, some analysts are still seeing significance that the product was deemed a breakthrough aside from whether it will actually accelerate development.
Is this gaming the system? It certainly could evolve that way. If just getting the designation helps to bump stock price, will companies apply for breakthrough status regardless of whether or not it seems therapeutically appropriate? One need only study the benighted history of “accelerated approval” to be somewhat dubious of motivation.
And wither "Special Medical Use?"
Kudos then to John Leonard, AbbVie senior VP and chief scientific officer, who downplays the hype surrounding breakthrough status. He reminded analysts on its quarterly call that “it doesn’t necessarily predict a regulatory outcome, however, or accelerate the review,” but does allow an opportunity for good planning.
Thank you, John