pSivida shares slide after third FDA knockback

pSivida (ASX:PVA) shares tumbled after licensee Alimera Sciences received a third complete response letter from the US FDA regarding diabetic macular edema (DME) treatment Iluvien.

The regulator has indicated it would require a new clinical trial with at least 12 months of follow-up data to approve Alimera’s New Drug Application for Iluvien, which uses a sustained-release ocular micro-insert designed by pSivida.

The FDA has previously rejected Alimera’s applications through the issue of complete response letters in 2010 and in 2011. Considering the additional costs and time required for a new trial, this third setback could potentially spell the end of the road for Iluvien in the US.

But pSivida did note in a stock exchange filing that the FDA has agreed to schedule a Dermatologic and Ophthalmic Drugs Advisory Committee meeting to discuss whether there is a DME patient population in which the benefits of the product may outweigh the risks.

While pSivida does not specify, this subgroup could be DME patients who have undergone cataract surgery (pseudophakic patients).

There is a history of regulators being more impressed with Iluvien data in that subgroup - while the UK’s National Institute for Health and Care Excellence (NICE) twice denied reimbursement as a general DME treatment on the grounds that the benefits do not justify the price, it did agree to recommend the product for reimbursement for pseudophakic patients.

“We are extremely disappointed by the FDA’s decision not to approve Iluvien at this time,” pSivida CEO Dr Paul Ashton said. “However, we are pleased that Alimera plans to continue to work with the FDA, through the advisory committee, to determine whether there is a path forward in the US for Iluvien.”

Alimera’s main focus for the product is Europe, he said, and Iluvien is approved and available in the UK and Germany and due to launch in France early next year.

But the market did not react well to the new regulatory setback. The value of pSivida’s ASX-listed CDIs had fallen to $2.66 as of around 1.30 pm on Tuesday, down from $4.99 the week before the FDA’s decision was announced.

The steepest decline was on Monday, the ASX trading day after the notice was made public in the US. pSivida’s trading price fell 27.08%.