Busy Day At The FDA

Busy Day At The FDA

Late this afternoon the FDA two major decisions. Per a press release from Intarcia;

“Intarcia Therapeutics, Inc., a privately held biopharmaceutical company committed to developing innovative therapies to enhance treatment and prevention outcomes in serious chronic diseases, today announced that the U.S. Food and Drug Administration (FDA) has issued a Complete Response Letter (CRL) for ITCA 650 (exenatide implant) for the treatment of type 2 diabetes. The Company looks forward to meeting with the FDA and working closely together on next steps. Intarcia does not anticipate the need to conduct new pivotal trials or any long lead-time CMC activities in order to satisfy the requirements of the FDA. The Company received clear and constructive guidance from the Agency regarding manufacturing aspects of the CRL and is on a clear path to move forward.”

The second comes from Abbott (NYSE: ABT);

“Abbott (NYSE: ABT) today announced that the U.S. Food and Drug Administration (FDA) has approved the FreeStyle® Libre Flash Glucose Monitoring System as a replacement for blood glucose monitoring (BGM) for adults with diabetes in the U.S.”

Let’s examine the impact of both decisions starting with Intarcia. Based on the wording of the press release the issues that concern the FDA would appear to be manufacturing related and not safety or efficacy related. While this news is disappointing we remain confident that the company will work diligently to address the issues in the letter. The company is in a strong financial position and should be able to weather this setback.

The decision on the FreeStyle Libre has deeper implications and sets up a battle between the company with CGM leader Dexcom (NASDAQ: DXCM). In the short term, we expect shares of Dexcom to feel the impact but we see no reason to change our long-term outlook. In one respect, this decision by the FDA does benefit Dexcom as they now know the FDA will approve a sensor that does require finger stick calibration. Given the accuracy of the Dexcom system we see it just as a matter of when this happens and not if it will happen.

We will examine the deeper implications of both news item in a post tomorrow.