December 30, 2016
By Alex Keown, BioSpace.com Breaking News Staff
ATHLONE, Ireland – Shares of Ireland-based Innocoll have plunged nearly 67 percent after the company announced it received a Refusal to File letter from the U.S. Food and Drug Administration for Xaracoll, the company’s product candidate for the treatment of postsurgical pain.
According to a release issued by the company, the FDA said the application submitted in October “was not sufficiently complete to permit a substantive review.” In the letter, the FDA said Xaracoll should be classified as a drug/ device combination, which requires Innocoll to submit additional information.
The FDA could require the company to conduct additional tests on Xaracoll, which would require more funding. According to company information, Xaracoll is a surgically implantable and bioresorbable bupivacaine-collagen matrix that utilizes the company’s CollaRx collagen-based delivery technology. The treatment is being developed to provide sustained postsurgical pain relief directly into the surgical site. Xaracoll is designed to reduce the need for systemic opioids and their associated risks.
The company submitted Xaracoll for approval based on positive Phase III data that showed statistically significant differences in pain intensity versus the control. When the company submitted Xaracoll for approval, they anticipated acceptance for review by the end of the year and a target of August 2017 for commercialization.
Late Thursday, Innocoll said the company is seeking a Type A meeting with the FDA to discuss the application and respond to “several issues believed to be addressable.” Additionally, Innocoll said it will seek additional clarifications of any additional information the FDA requires. A Type A meeting with the FDA is usually held to move stalled projects forward. The company said it will disclose any additional details regarding Xaracoll following its meeting with the FDA.
“We expect to work with the FDA over the coming weeks in an effort to address the open issues and to define a path forward for a successful re-filing of our application at the earliest point in time,” Tony Zook, Innocoll’s chief executive officer said in a statement.
Ken Trvobich, an analyst with Janney, told Forextv that he expects the FDA’s rejection letter to delay Innocoll’s plans for Xaracoll by at least a year. What’s more troubling is that Trvobich said the company does not have enough financial resources to sustain itself through 2017.
“We expect the need for additional capital to lead to a future financings that are far more dilutive than we previously estimated,” Trvobich wrote in his note, according to Forextv.
Year-to-date Innocoll’s stock is down nearly 80 percent, according to Zack’s. In its third quarter earnings, the company reported revenue of $900,000, with a net loss of $17.2 million. The company said in its filing that it had $30.4 million in cash and cash equivalents as of Sept. 30. At the time the company said it planned to manage its resources to “extend the cash runway until after the anticipated XARACOLL NDA approval, expected in the third quarter of 2017.”
