Business First by Carrie Ghose, Staff reporter
The U.S. Food and Drug Administration late Monday declined to approve sales of Navidea Biopharmaceuticals Inc.’s radioactive diagnostic aid Lymphoseek, delaying the long-awaited start of sales projected in the hundreds of millions of dollars.
“The FDA noted the decision was focused on issues with third-party Lymphoseek contract manufacturing, and was not related to any efficacy or safety data,” Navidea said in a press release.
Dublin-based Navidea (NYSE:NAVB) said it would work with the FDA and the manufacturer to resolve the issues and resubmit the drug for approval.
“We remain confident that our clinical data clearly demonstrate the value of Lymphoseek in accurately identifying lymph nodes that most likely harbor cancer while producing no clinically significant adverse effects,” CEO Mark Pykett said in the release.
Navidea had filed its application in October and hoped for approval in June, but the decision was pushed back while it provided more information on chemistry and manufacturing to the agency. Meanwhile, the company is awaiting an OK for the drug in Europe.
Sales of Lymphoseek were seen as a long-awaited turnaround for investors in a biotech that’s been profitable twice in three decades. The drug was to have been marketed under an exclusive distribution agreement with Dublin pharmaceutical giant Cardinal Health Inc. (NYSE:CAH), which splits revenue 50/50. Cardinal Health runs the nation’s largest network of pharmacies that specialize in the highly regulated and complex compounding of drugs containing radioactive elements.
Lymphoseek has a radioactive element attached to a compound that binds only to tissue in the body’s lymph nodes, so that surgeons can find the closest nodes that drain fluid from a tumor and test if the cancer has spread. Drugs used in the procedure before don’t target lymph tissue, and research indicates Lymphoseek is more accurate, as well as lacking painful side effects and allergic reactions associated with the other agents.
Analysts at ThinkEquity LLC last week projected that if it were approved for sales starting in the fourth quarter, revenue could hit $36.5 million next year and could have grown to $150 million yearly by 2016. Without approval, Navidea also cannot access a second $20 million segment of a $50 million credit line from Navidea’s largest investor, New York City-based Platinum-Montaur Life Sciences LLC.
Navidea has not yet drawn on the first $15 million segment of the credit line, which is not tied to any milestones.
In a conference call with investors, Platinum-Montaur Principal Michael Goldberg said the equity fund is "commited to providing the company the capital it needs."