Orphazyme Inc. (NASDAQ: ORPH) stock declined by 10.18% at last close whereas the ORPH stock price fell during the pre-market trading session by 58.18%. Orphazyme is a late-stage pharmaceutical business that is pioneering the use of heat shock proteins to treat uncommon illnesses.
What is happening?
Following its evaluation of the new drug application for arimoclomol which is a heat shock protein amplifier designed for the cure of Niemann-Pick disease type C, ORPH obtained a Final Response Letter from the US Food and Drug Administration.
The FDA issued the CRL because it needed more qualitative and quantitative data to support the accuracy and reliability of the 5-domain NPC Clinical Severity Scale (NPCCSS), especially the swallow domain. In addition, the FDA said in the CRL that more research is required to supplement confirmatory evidence beyond the single phase 2/3 clinical trial to justify the NDA’s benefit-risk analysis.
CEO Christophe Bourdon stated,
ORPH is disappointed by the FDA’s decision, considering the critical need for a new treatment option for NPC, but they remain dedicated to working with authorities to provide arimoclomol to families dealing with this difficult condition. ORPH will concentrate their efforts on obtaining European regulatory clearance, with a CHMP opinion due in Q4 2021 and a possible Marketing Authorization in Q1 2022. In collaboration with the FDA, they are evaluating the potential route forward in the United States. To enable NPC clearance in the short term, they will need to significantly decrease their expenditures and freeze all business initiatives that are not linked to clinical and regulatory operations.
Orphazyme’s original expectation for the year was subject to numerous risks and uncertainties, including but not limited to the timeliness of regulatory decisions, the effectiveness of their commercial initiatives, and the development operations, as described in ORPH’s Annual Report 2020. The result of the FDA decision will have a major impact on Orphazyme’s full-year 2021 forecast.
Orphazyme now estimates operational expenditures of DKK 700-720 million (up from DKK 800-850 million), resulting in a DKK 670-700 million operating deficit (previously DKK 100-150 million). At the end of 2021, the cash position is projected to be around DKK 50 million (previously DKK 350 million).