Why Is Tricida Trading Lower?

Tricida Inc (NASDAQ: TCDA) has received an Appeal Denied Letter (ADL) from the Office of New Drugs (OND) of the FDA in response to the company's Formal Dispute Resolution Request (FDRR) submitted in December.
The FDDR requested that the magnitude of serum bicarbonate change seen in the TRCA-301 and TRCA-301E trials is reasonably likely to predict clinical benefit in treating metabolic acidosis associated with chronic kidney disease (CKD).
Though ADL cited that the extent of serum bicarbonate increase observed in the TRCA-301/TRCA-301E trial is not sufficient to provide a reduction in CKD progression.
The additional issues also included:
- Reliability of the data due to the disproportionate impact of data from a single high-enrolling clinical site on the trial's results.
- Applicability of the treatment effect to the U.S. population, as the majority of the subjects in the study were enrolled in sites outside of the U.S.
- The OND also concluded that the confirmatory trial, VALOR-CKD, is underpowered to detect the effect size (13%) based upon the placebo-subtracted mean treatment effect observed in TRCA-301/TRCA-301E trial.
- The company said that based on the concerns expressed, it believes that the FDA could require an additional trial or trials to support resubmission of the veverimer marketing application through the Accelerated Approval Program.
Tricida intends to continue the VALOR-CKD trial without further modifications at present with consideration of both the accelerated and traditional approval pathways.
After receiving the complete response letter, Tricida reduced its headcount from 152 to 59, resulting in annual operating costs declining by around $25 million.
Price Action: TCDA slumped 23% at $5.7 in premarket trading on the last check Friday

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Why Is Tricida Trading Lower?