Key points:
- ObsEva's uterine fiboroids treatment has hit FDA probelms
- ObsEva is to drop linzagolix entirely
- Also, OBSV is to seek court protection from creditors
ObsEva (NASDAQ: OBSV) stock dropped 75% premarket this morning as the company announced that it was dropping linzagolix, a treatment for uterine fibroids. This is something of an oddity, a puzzle, as it only just – as in 10 days ago – received authorisation to market in Europe. The reason is that the US is the major market for all such drugs and treatments and the US Food and Drug Administration is playing the usual game of not accepting what foreigners might say but demanding its own proofs to its own rules.
The FDA has notified ObsEva of “review issues regarding deficiencies” over linzagolix. It's simply not possible to deal with these issues before the time runs out on the application and therefore ObsEva is dropping the licence for the drug, returning that to the originators (Kissei) and restructuring the company to deal with the problem. They've also applied to the Swiss court for a moratorium to apply during that restructuring. This isn't, but is akin to, a Chapter 11 reorganisation.
It's possible to view this in societal terms, which means bad news for the ladies. Uterine fibroids don't have many treatments and at the extreme can lead to infertility either directly or via the treatment by hysterectomy. A drug treatment for this rather common problem would be a significant advance.
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What might annoy is the specifics of the problems at the FDA. Given that the European Medicines Agency gave approval back in April, then 10 days back the European Commission granted marketing authorisation, it would appear that the FDA would be a shoo-in. But that's not how it works sadly. The FDA can – and does as here – refuse at any time. Now the specific is that there are matters that need to be addressed. But these can't – according to the company – be addressed by the necessary date of 13 Sept this year under the Prescription Drug User Fee Act. So it might not even be that the FDA will refuse the US lience. It could be more paperwork required but that can't be done in time. Therefore the whole application is dropped and that's that.
Isn't it unfair that some think that the FDA doesn't do all that wonderful a job of regulating medicines in the US? Just grossly unfair. And, of course, women now don't gain access to a drug for those uterine fibroids that the Europeans have already said yes to.
For the company, ObsEva, this is something of a killer blow thus the 75% drop in the stock price at OBSV. Only marketing in Europe doesn't make financial sense, so without being able to gain that US licence that's the end of this linzagolix adventure for ObsEva. It's also, to a certain extent, the end for ObsEva stock itself. For as a result of having to restructure the company is to seek protection from the Swiss courts – something akin to Chapter 11 really – against debt collections and so on.