11/7/2013 7:05:52 AM
Author: Ed Silverman of Pharmalot
For the past month, shares in a small developer of novel drugs called Catalyst Pharmaceutical
Partners have given up roughly half their value amid an unusual public relations war with a
privately held drugmaker over a potentially lucrative market for an orphan medication. But the tale
has some twists that include a decommissioned nuclear reactor and free dosing for existing
Here is the situation: Catalyst licensed a drug from Biomarin Pharmaceuticals called Firdapse to
treatment Lambert-Eaton Myasthenic Syndrome, or LEMS, a rare autoimmune disorder that is
characterized by muscle weakness and often associated with an underlying form of cancer. LEMS
is considered a rare disease since only 3,000 or so people in the US are known to be affected.
This means that Firdapse, which is in Phase III testing and will likely be submitted to the FDA for
approval in early 2015, qualifies as an orphan drug. Already, there is speculation that Firdapse,
which received breakthrough therapy designation from the FDA, may cost $60,000, which would
yield at least $200 million in sales. However, Catalyst ceo Patrick McEnany tell us that a price has
not yet been set.
Seems straightforward, yes? There is a curve, though. A little-known, privately held company
called Jacobus Pharmaceuticals has, for some 20 years, given a version of the drug called 3-4,
Dap to approximately 200 patients for free under an FDA-approved compassionate use program.
The drug is administered by individual doctors, most of whom are located at a select few medical
Jacobus, which is run a by father-and-daughter team, say their involvement began when the
Muscular Dystrophy Association approached them to make the drug for testing. Since then, the
drugmaker claims to have a tight relationship with the FDA and patients. “We didn’t get into this for
any reason other than to help the patients,” Laura Jacobus tells us. “We give it away because it’s
the right thing to do.”
However, a behind-the-scenes rivalry burst into public view last month after TheStreet ran a story
in which she, effectively, charged Catalyst with greed and indifference to LEMS patients. In her
view, Catalyst is akin to a carpetbagger that is attempting to exploit a vulnerable population and
force insurers and government agencies to pay for a treatment that can be obtained at no cost.
“I think it’s about making money,” Laura Jacobus tells us. “If somebody wants to make a
contribution to society, they should come up with an idea and buckle down and make it available
for a reasonable cost. We don’t need to foster copycats. We need to foster innovation and we
need to foster access to medicines for people who don’t have access.”
The story in TheStreet also noted that the family-run drugmaker has been running its own trial to
win FDA approval to market 3-4, Dap to treat LEMS and is nearing an end, although
ClinicalTrials.gov says the trial is in Phase II (look here). In other words, there is a race to
marketing exclusivity, and the suggestion hit Catalyst stock, prompting Wall Street to hunt for clues
into what might happen next.
In the process, one analyst issued an investor note likening Jacobus to a compounder, and noted
the FDA issued 483 inspection reports for the Jacobus facility in New Jersey in 2011 and again in
2012. Among the findings: a failure to investigate batches that did not meet specification;
procedures for cleaning equipment used to make active pharmaceutical ingredients were not
followed; facilities fo storing ingredients were inadequate, and there was no method for monitoring
impurities, among other things.
Catalyst Pharma Fights Greed Charges Over An Orphan Drug | Pharmalot
http://www.pharmalive.com/catalyst-pharma-fights-greed-charges-over-an-orphan-drug[11/6/2013 3:44:38 PM]
“These inspection reports reduce our confidence in Jacobus’ ability to meet the regulatory
demands for the supply of an orphan pharmaceutical in the US,” wrote Andrew Fein of HC
Wainwright, who added that Jacobus management initially agreed to discuss its business model,
but the call was cancelled and he was directed to whatever information is available in the public
So what else did he come up with? He cited a book that mentions that a nuclear test reactor that
was built in 1957 on the site where Jacobus laboratories are located and once housed low-level
atomic research (see this). In tongue-in-cheek fashion, he wondered whether FDA inspectors carry
Geiger counters to the Jacobus building, although he conceded that it is unclear if this affects the
agency view of the facility.
What does Jacobus say about this? “I’ve never been in the business of running somebody down.
If they want to dust off a form from the past, they’re welcome to do so, but it doesn’t help the
patients… And there was no 483 this year; we had an inspection in July. If someone wants to sling
mud at us, we have very broad shoulders… And the decommissioned nuclear reactor is a red
herring. Do you think the FDA would approve a site since 1997 if it were a problem? If I was the
FDA, I’d be pretty puckered.”
For his part, McEnany agrees that the reactor issue may well be irrelevant. And as he told
TheStreet, he believes bring an FDA-approved drug to the LEMS patient population is a worthy
goal, since none currently exists and the Jacobus compassionate use program can only reach
between 100 and 200 people, which means most patients do not have access to treatment,
regardless of the free cost to others.
“If there were a safe and approved drug by the FDA and it was provided by a physician, the other
2,800 patients would have easy access to this drug,” he says.
He also questions Jacobus motivations. “They weren’t really interested in a clinical trial, or at least
not in a hurry” to do so until Catalyst began work, he says. “We’re following an FDA-mandated
program for Firdapse, which includes not only a Phase III study, but also safety studies and a
pharmacokinetic study. We’re doing a cardiovascular QT study and a renal care study and a food
“This is a $40 million to $50 million project to do it the way the FDA said they want it done,”
McEnany continues. “I don’t know how anybody can say they’ll spend $40 million to $50 million to
develop the drug and then continue to provide the drug for free.”
Jacobus declined to discuss the financing for the trial or further details of their plans.
Meanwhile, Catalyst (CPRX) is trying to rebuild confidence among investors by creating a social
media strategy to reach patients (see this), especially after TheStreet ran a second story that
quoted an LEMS patient who worries he will not be able to afford Firdapse if Catalyst beats
Jacobus to FDA approval. However, McEnany asserts that Jacobus will be able to continue
providing 3-4,Dap to existing patients, regardless of which company wins the race.
To that, Jacobus says this: "They can receive the drug, but not from us. It would be their decision.
Only a company with marketing approval can make a drug available at cost or on a compassionate
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