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Catalyst Pharmaceutical Partners, Inc. (CPRX) Fights Greed Charges Over an Orphan Drug

11/7/2013 7:05:52 AM

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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 patients.

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 centers.

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 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[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 domain.

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 effects study…

“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 basis."

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