"Chiasma shares plummet after FDA rejects drug" by Robert Weisman Globe Staff April 18, 2016
Chiasma Inc.’s stock fell 63 percent Monday on news that US regulators had rejected the Waltham company’s experimental drug to treat a pituitary gland growth disorder.
Chiasma, a 15-year-old company with research and development operations in Israel, said it received what is known as a “complete response” letter from the Food and Drug Administration.
“It was a big disappointment, very disappointing.”
The drug candidate, called Mycapssa, treats a disease of the pituitary gland known as acromegaly, which results in the production of excess growth hormone. Acromegaly, which causes enlargement of the hands, feet, and facial features, affects about 70,000 people worldwide, including 24,000 Americans, and can lead to serious illness and premature death.
FDA officials faulted the so-called single-arm design of Chiasma’s clinical trial, which didn’t compare patients taking its drug to others given a placebo, the company said. It said the agency recommended a placebo-controlled trial that would be more expensive but would enable regulators to better assess the drug.
Leuchtenberger said Chiasma has no plans to cut its workforce, which includes about 45 people in the United States and 25 in Jerusalem, but the company is “doing a complete inventory of our resources.” While it has stockpiled about $134 million in cash, Chiasma will hold off on hiring a commercial sales force until the path for Mycapssa is clearer, he said.
Chiasma’s stock fell $6.42 to $3.75 on Monday, after trading as high as $30.52 in August.
The company, which is working on a pipeline of so-called orphan drugs to treat rare diseases, uses an oral-peptide technology to convert injectable therapies into pills, allowing patients to take the drugs themselves. Mycapssa, its lead therapy, combines an existing drug called octreotide with an enhancer that enables it to be swallowed.
But “upon completion of its review, the FDA advised Chiasma that the agency did not believe the company’s application had provided substantial evidence of efficacy to warrant approval and advised Chiasma that it would need to conduct another clinical trial in order to overcome this deficiency,” the company said in a statement Monday.
Chiasma raised $102 million in an initial public offering last summer. In 2013, it signed a $595 million agreement with the Swiss drug giant Roche AG to collaborate on a treatment for acromegaly and potentially other oral medicines to treat neuroendocrine tumors. But that deal collapsed last year when Roche backed out....
They found a new partner.