Persistence paid off for Discovery Laboratories Inc., whose synthetic, peptide-containing surfactant Surfaxin (lucinactant intratracheal suspension) received FDA approval late Tuesday for the prevention of respiratory distress syndrome (RDS) in premature infants at high risk for the condition.
On Wednesday, euphoria about the approval was reflected in the company's shares (NASDAQ:DSCO), which gained 40 percent overnight, opening at $5.25 before falling back to close at $4.08, up 8.8 percent. More than 25 million shares were exchanged nearly 40 times the average trading volume.
During a conference call early Wednesday, company officials said they would launch Surfaxin "toward the tail end of 2012" and are putting a commercialization team in place. For competitive reasons, pricing information will not be disclosed until later in the year.
Discovery Labs plans to spend $12 million to $13 million this year in the U.S. to launch Surfaxin and the company's aerosol delivery system Afectair, an FDA-registered Class I exempt medical device that will be used to deliver the next generation of Surfaxin.
Globally, the company will seek to partner Surfaxin. Talks already are under way, and the company hopes to ink an alliance by year-end, according to John Cooper, the company's president and chief financial officer.
"This is a new generation of technology that's about to be employed in respiratory critical care," Cooper told BioWorld Today. "Surfaxin is just the beginning."
Surfaxin is the first synthetic, peptide-containing surfactant approved for use in neonatal medicine, with a back story that rivals a Hollywood comeback classic.
Discovery Labs initially sought approval for Surfaxin, a synthetic lung surfactant containing both peptides and lipids that was invented at the Scripps Research Institute in La Jolla, Calif., in acute respiratory distress syndrome in adults. That process began in the 1990s, but in 2000 the company halted a pivotal Phase II/III trial in the indication after problems with the compound's manufacturing process and difficulties funding the project internally. (See BioWorld Today, July 15, 1998, and Jan. 28, 2000.)
The company continued to pursue a second indication in full-term infants with meconium aspiration syndrome before adding RDS in premature infants and beginning preclinical studies into converting Surfaxin into aerosolized forms for the possible treatment of asthma, chronic obstructive pulmonary disease, acute and chronic bronchitis and other respiratory diseases.
RDS is a condition in which premature infants are born with an insufficient amount of pulmonary surfactant, a substance produced naturally in the lungs that is essential for breathing. Some 90,000 premature infants in the U.S. are treated annually for the condition.
Expecting a quick approval in RDS, Discovery Labs raised money internally in 2001 and signed a marketing deal for the product with Innovex Inc., a subsidiary of Quintiles Transnational Corp., of Research Triangle Park, N.C. Despite hitting the primary Phase III endpoints, the next twist in Surfaxin's plotline didn't exactly follow the company's script. (See BioWorld Today, Nov. 26, 2003.)
In November 2004, Quintiles returned commercialization rights to Surfaxin and Discovery Labs began planning its own sales force. But a month before the March 13, 2005, PDUFA date, the FDA raised concerns about compliance with current good manufacturing practices and other processes to be used for commercial production of the product, following its review with an approvable letter. (See BioWorld Today, Nov. 5, 2004, and Feb. 2, 2005, and Feb. 15, 2005.)
Ongoing discussions with the FDA, along with a bevy of financings and millions spent on manufacturing fixes, only led to a second approvable letter in 2006, which was followed by failed process-validation batches of the compound, analyst downgrades, staff reductions and a securities class-action lawsuit. (See BioWorld Today, April 6, 2006, May 8, 2006, and April 26, 2012.)
The company soldiered on, but in May 2008 received a third approvable letter, which generated more meetings with the FDA and additional manufacturing and biological activity tests while Discovery Labs continued to generate clinical data in RDS and other indications. (See BioWorld Today, May 5, 2008.)
The company's shares were rocked again in April 2009 when the FDA again delayed Surfaxin this time with a complete response letter (CRL) citing the need to confirm a biological activity test of the drug's stability and release and to tighten one drug product specification. The CRL seemed a last straw, with Discovery Labs considering dispute resolution procedures rather than accepting a longer approval timeline involving additional preclinical work. (See BioWorld Today, April 21 , 2009.)
Ultimately, Discovery Labs performed more preclinical work in lieu of a new, limited trial of Surfaxin, submitting its response to the CRL in September 2011 and triggering this week's PDUFA date.
Surfaxin was approved on the basis of a single randomized, active-controlled, multidose study involving 1 ,294 premature infants that demonstrated safety and efficacy.
Surfaxin demonstrated significant improvement in both RDS at 24 hours after birth and RDS-related mortality through two weeks when compared with Exosurf (colfosceril palmitate, GlaxoSmithKline plc), the primary comparison drug, which is no longer marketed.
The most common side effects were related to administration, including endotracheal tube reflux, skin paleness, endotracheal tube obstruction and need for dose interruption.
The lesson learned from Surfaxin's long and winding road is "always to conduct your activities with the FDA's requests in mind" and to develop a "tight, well-organized [chemistry, manufacturing and controls] package," Cooper said. "The issues we had to address with the FDA were all CMC issues never a clinical issue, and never a concern about the efficacy of our drug."
Discovery Labs will embrace those lessons as it moves its pipeline forward, said Cooper, who had a front-row seat to the regulatory drama after joining the company in 2001 .
In the end, the regulatory saga "made us a better company," he maintained. "We're a stronger company, we've learned a lot of lessons, we're a much more diligent and organized company and we're looking forward to the future."
The Warrington, Pa.-based biotech now turns its attention to the commercial challenge of penetrating a crowded market, which still includes three surfactants for RDS in premature infants: Survanta (beractant, Abbott), Curosurf (poractant alpha, Cornerstone Therapeutics Inc.) and Infasurf (calfactant, Ony Inc.).
Discovery Labs officials maintained that existing technology has grown stale, with Surfaxin launching what Cooper called "a new decade of medicine in neonatology."
"Surfaxin is a gateway, quite frankly, to our pipeline," Cooper said. "We have a portfolio of products that could transform the way RDS is managed for premature infants."
The company is developing additional products for RDS through a variety of dosage forms, including Surfaxin LS, a lyophilized formulation of its KL4 surfactant technology currently in Phase II studies, and Aerosurf, an aerosolized KL4 surfactant that Cooper characterized as a game-changer. Aerosolized Surfaxin could "double or triple the amount of patients who would benefit" from the drug, he said.