Is Approval of Bristol-Myers Squibb's Yervoy Start of New Chapter at FDA?

By David Miller Last week, I wrote in Why FDA May Not Approve Bristol-Myers Squibb's Ipilimumab how I believed the most likely outcome of Bristol-Myers Squibb's (BMY) application for ipilimumab (trade name Yervoy) would be a delay in the decision by the FDA. Instead, FDA oncology division director Richard Pazdur approved Yervoy on Friday. But that's not all he did. Bristol-Myers applied for approval only in patients who had failed prior treatments. This is because the Phase III trial (the so-called "020" trial) Bristol-Myers conducted as a basis for approval enrolled no treatment-naïve (as in not receiving prior chemotherapy) patients. Pazdur went beyond this request and approved Yervoy for all late-stage melanoma patients -- those who failed prior treatment and those who were treatment naïve.

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Bristol-Myers approval application was a biostatistical mess. The 020 trial was set up to prove the efficacy of Yervoy in combination with a peptide immunotherapy called gp100. The trial failed to prove this. Instead, the trial seemed to show Yervoy was more effective as a monotherapy. However, there is evidence receiving gp100 immunotherapy alone was actually worse for patients than the general standard of care. Pazdur is notorious for rejecting data from other companies based on similar biostatistical anomalies, yet he looked past all this and approved Yervoy. One can argue the need among these melanoma patients is great, so that's why Pazdur did what he did. However, Pazdur has previously ignored similar patient need for prostate, leukemia, and breast cancer patients. In fact, Pazdur has gone the other way with every similar decision in front of him since he solidified his control of oncology drug approval in 2004. This track record since 2004 was the basis for my opinion last week. I presumed the regulatory “rules” as imagined by Pazdur and applied by him in the past would be repeated when reviewing Yervoy. The approval of Yervoy broke all of those rules, which is why I got it wrong -- or as one person kindly pointed out to me, Yervoy being approved for all melanoma just came earlier than I expected.

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If you look back over what I've written here at Minyanville, and especially if you happen to be a client of my firm's biotech research, you will see I've been calling for “adult supervision” at the FDA and specifically of Pazdur for a long time. President Bush appointed the best FDA Commissioner we've had in a long time in Mark McClellan, but Dr. McClellan moved to work on Medicare and Medicaid in 2003. Over the following five years, the FDA was most often run by a veterinarian who ended up being convicted, sentenced to three years probation, and fined $90,000 for playing the stocks of the companies he regulated. President Obama restored strong leadership at the FDA, ending five years of largely “acting” commissioners. I hoped out loud this would return some patient-centered discipline to the FDA, specifically to Pazdur and the oncology division. Ironically, the approval of Yervoy is exactly the kind of patient-centric decision I've been yelling at Pazdur to start making. Ignoring overly conservative interpretations of biostatistics and rules -- particularly when common sense and patient need provide strong arguments for doing so -- is exactly what the FDA needs to start doing. Additionally, the fact Yervoy was approved despite being an unpredictably toxic drug arguably could indicate the FDA is now doing a better job balancing risk and reward than we've seen recently.

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On the Buzz & Banter Friday, I briefly addressed this issue. I noted that if the Yervoy approval represents a new leaf at the FDA, most investors are dramatically underweight biotech. Grab a chart of the NASDAQ Biotech Index (NBI) from mid 2002 to the end of 2004. While some of the gains off the bottom in mid-2002 were due to the overall macro market, most of what we subsequently saw in the 2002-04 period was due to health care investors seeing Dr. McClellan's FDA as more accommodating to new drug approvals. My firm's model portfolio was up 88% in 2003 and the NBI was up 45%, indicating the idea of a more reasonable FDA is of significant importance to investors. Trying to determine, therefore, whether Friday's Yervoy decision is a fluke or a new trend is no idle matter. If this is a new trend, the resulting investment gains could be considerable. Earlier this year, Pazdur issued to Roche-Genentech a so-called “Refuse to File” (RTF) letter. RTFs are unusual because they are the FDA's statement an application for drug approval is so off base or incomplete it isn't even worth reviewing. Roche was seeking approval of T-DM1, a targeted therapy for treatment of breast cancer patients who have a certain genetic profile (her2-neu positive) and who have failed all other targeted therapy.

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