Global Insight Perspective | |
Significance | The FDA is expected to follow the advisory committee’s advice—although it is not required to—and reject Merck's New Drug Application (NDA) for Arcoxia. |
Implications | The overwhelming majority with which Arcoxia was rejected in the committee clearly indicates that the FDA's medical advisors are not prepared to allow another Cox-2 inhibitor onto the U.S. market, following the side-effects revelations that led to the withdrawal of Merck's own Cox-2 Vioxx (robecoxib) and Pfizer's Bextra (valdecoxib). The sole remaining Cox-2 inhibitor on the U.S. market, Pfizer’s Celebrex (celecoxib), will retain its exclusivity for a bit longer, although Merck is expected to continue its fight to bring Arcoxia to the U.S. market. |
Outlook | Merck will put up a good fight in an effort to convince the FDA to allow marketing of Arcoxia in the United States. There is a limit, however, on how much more the company should spend on conducting clinical trials of Arcoxia—considering the choice of a comparator drug in the current trials is partly to blame for Arcoxia’s defeat—and how much longer it should wait before it gives up on Arcoxia. The Cox-2 inhibitors market remains no doubt a highly attractive target for Merck—and the battle to re-enter it will continue for quite some time. Meanwhile, Merck has boosted its EPS guidance in a bid to raise confidence, but the Arcoxia outcome remains a bitter pill for investors to swallow. |
Sound Defeat for Merck’s Arcoxia in Advisory Committee Review
Merck’s new Cox-2 inhibitor Arcoxia was never expected to have a smooth sailing through the FDA approval process. It is a part of the now-disgraced group Cox-2 inhibitors, which have been implicated in reducing cardiovascular risks, sometimes with a fatal outcome, in patients. Merck is currently dealing with many million-dollar lawsuits, seeking compensation from patients or their families claiming they have suffered heart attacks and other CV complications after taking Merck’s now withdrawn Cox-2 inhibitor Voixx.
The Arcoxia application went through several resubmissions, with Merck’s latest filing seeking approval for a lower dose and for just one indication—osteoarthritis (see box). There were also issues raised about the validity of Merck’s Arcoxia clinical data. Despite presenting safety and efficacy data from a 34,000 patient trial—the so called MEDAL—Merck’s data were thought to be deficient because of the choice of a comparator drug, naproxen, which also carries a heightened risk of cardiovascular side-effects.
Arcoxia's Bumpy Road to Review |
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Still, the sound defeat of Arcoxia at its independent committee review yesterday—with 20 to 1 voting against its approval—is a bit shocking. The committee it would seem has taken the FDA’s guidance issued prior to the review very seriously. In briefing documents prepared for yesterday’s committee meeting, the FDA said that “a new product that appears to have an increased overall risk profile for CV disease, particularly beyond that seen with other drugs, would not be appropriate for marketing unless the product fills an unmet medical need for a particular patient population that has no relatively safer approved products available to them, and provides a reasonable risk to benefit balance for that population."
The Committee's recommendation for non-approval will be considered by the FDA as part of its review of the NDA that Merck filed in December 2003 (for a 60 mg once daily dose) and its review of a separate related NDA for a 30 mg once daily dose of Arcoxia submitted in April 2004. The FDA is not bound by the Committee's recommendation. However, considering the overwhelming committee majority in favour of rejecting the drug and the heightened public and Congressional scrutiny of FDA activity, the agency is expected to hand out a rejection of both Arcoxia NDAs by the 27 April action date.
Shortly after the advisory committee’s decision was announced, Merck said in a statement that it is committed to continuing work with the FDA to discuss the application in an effort to get regulatory approval for Arcoxia. Meanwhile, it will continue to market the drug in 63 countries outside the United States, where it is already approved.
Outlook and Implications
It appears almost certain at this stage that the FDA will follow its advisory committee meeting and reject Arcoxia before the end of this month. Merck has the option of appealing a negative FDA ruling, but is unlikely to go down that route in light of the controversy surrounding Cox-2s. The company would be definitely required to do additional clinical studies of Arcoxia before the drug-candidate is considered for approval again. In a future regulatory review, Global Insight would expect the FDA to accept some of the data from the MEDAL trials, requiring possibly another one year (or longer) of new clinical data comparing Arcoxia to a non-steroidal anti-inflammatory drug (NSAID) of the FDA’s choice or possibly to Pfizer’s Celebrex. Post-marketing surveillance data from other markets where Arcoxia is already available—particularly from European Union (EU) countries—would be expected to be allowed as part of a new approval bid by Merck.
In the meantime, Celebrex will remain the sole Cox-2 on the U.S. market for a while. The latter had sales of YS$1.577 billion in the United States in 2006 (24% higher year-on-year—y/y) and is expected to make quick gains boosted by a new direct-to-consumer advertising campaign. Pfizer should, however, expect tough FDA scrutiny of its marketing efforts for Celebrex. A TV commercial for Celebrex—which the Public Citizen group is trying to get banned from airing—appears to contain misleading claims about Cox-2s risks vis-à-vis the risks of other NSAIDs. Pfizer would also be wise to keep in mind that yesterday’s rejection of Arcoxia was not just a recommendation against Arcoxia—it was a reflection of regulators’ wariness of Cox-2s in general.
For Merck, the rejection of Arcoxia is a risk factor already factored into its performance expectations. The company clearly hopes for an eventual U.S. approval of the drug—and while the delay is unwelcome and costly—it is not the end of the road for its U.S. Arcoxia hopes. Positive outcome of a future study—ideally one with Celebrex as comparator—could salvage what has been lost yesterday and result in a stronger label for Arcoxia in future. The immediate fallout of the negative recommendation is being addressed with a swift EPS guidance increase by Merck. The company announced late yesterday that it raises its EPS guidance for the first quarter to US$0.84 per share (up from US$0.63-0.67) and for the year to US$2.75-2.85 (up from US$2.55-2.65). The EPS guidance revision is subject to the complete analysis of first-quarter data. Merck could revise it downward later—once the Arcoxia rejection fallout has been dealt with.
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