Opko Health Inc. (NYSE:OPK) progress around its New Drug Application for RAYALDEE with the U.S. Food and Drug Administration took a back seat after it hit a regulatory roadblock. The company informed its shareholders that the regulator has noted some deficiencies at its third-party contract manufacturer.
Rayaldee is a drug developed by Opko to treat secondary hyperparathyroidism (SHPT) in patients, who have entered 3 or 4 level stage in chronic kidney disease (CKD). The drug is also meant for those SHPT patients, who suffer from vitamin D deficiency.
In its Complete Response Letter (CRL), the FDA mentioned the observations made relating to the deficiencies at the third-party manufacturer’s end. These observations were issued on March 25, 2016, following the completion of field inspection during mid-March. The CRL did note that the deficiencies observed are not specific to the drug nor its is related to efficacy, safety or labelling issues. Moreover, the drug regulator has not directed the company to undertake any additional studies, ahead of the FDA review.
Come against expectations
Opko Health reassured its investors that the company’s third-party contractor has committed to act promptly on the observations and arrive at an early resolution. Meanwhile, the company has shared that the Fed has accepted the name of the drug as Rayaldee.
Despite this assurance, the CRL from the FDA has poured cold water on the expectations of several analysts, who were optimistic about the positive outcome of the NDA. Analysts at Jefferies had maintained a hold rating on the company but had noted that they expect Rayaldee to pass through FDA approval in March. The analysts had even gone ahead projecting the new drug’s potential revenues, which were seen at $18 million in 2016 and $72 million in 2017.
The FDA’s response has served as a setback to these projections, which was evident from the fall in the company’s stock price. Opko Health’s shares nosedived by 10.66% to $9.89 during the previous trading session.