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Don't Miss The Next FDA Approval

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Next up on PDUFA Watch, we have Mallinckrodt PLC (NYSE: MNK). On February 23, 2018, it was announced that the United States Food and Drug Administration (FDA) had accepted the company’s New Drug Application (NDA) surrounding stannsoporfin. The PDUFA date is Wednesday, August 22, 2018. Chances are, the stock will see some losses on this day as the FDA is likely to reject the treatment.

What Is Stannsoporfin?

Stannsoporfin is a drug under development by Mallinckrodt for the treatment of neonates at risk for developing severe hyperbilirubinemia or severe jaundice. If approved, the treatment will be the first and only drug approved for this indication.

The treatment is a competitive heme oxygenase (HO) inhibitor that was originally developed by InfaCare, a subsidiary of WellSpring Pharmaceuticals. However, Mallinckrodt took over the asset when it acquired InfaCare back in September of last year. Unfortunately, it seems as though this acquired asset is going to flop.

Why Stannsoporfin Is Likely To Be Rejected

Based on a few factors, I believe that the FDA will be sending a Complete Response Letter (CRL), rather than a new drug approval down the line on or before the 22nd of August. Here’s why:

  • Digging Into The Data – As always, if you want to know whether or not the FDA is likely to approve a treatment, the first place to start is by digging into the clinical data surrounding the treatment. Unfortunately this proved to be the first red flag for Stannsoporfin. While the data showed some mild improvements, clinical studies didn’t generate very strong evidence of statistical significance when it comes to the reduction of risk of severe jaundice or severe hyperbilirubinemia.
  • Advisory Committee Votes Against Stannsoporfin – Another key factor here is the FDA’s advisory committee. On May 4th the FDA’s Gastrointestinal Drug Advisory Committee and Pediatric Advisory Committee voted nearly unanimously. In a 21 to 3 vote the committees voted against the approval of the treatment.

Don't Miss The Next FDA Approval

Subscribe to PDUFA Watch from iWatch Markets and you'll receive alerts a week before the PDUFA date. We'll tell you if the drug is likely to be approved and when to be watching!

Be Prepared For MNK Declines Ahead

At the end of the day, it takes quite a bit of time and resources to bring a new drug to the market. Therefore when a NDA is rejected by the FDA, we tend to see declines in the value of the stock associated with that NDA.

In the case of Mallinckrodt, while the company is a massive one with experience in bringing new drugs to market, it missed the mark here. Unfortunately, the data simply doesn’t support the approval of Stannsoporfin, and it seems like multiple FDA advisory committees agree. Therefore, within the next week, we’re likely to see some declines in the value of MNK as investors react to an FDA rejection!

Don't Miss The Next FDA Approval

Subscribe to PDUFA Watch from iWatch Markets and you'll receive alerts a week before the PDUFA date. We'll tell you if the drug is likely to be approved and when to be watching!

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