John Vandermosten, CFA
NYSE:PLX
Following the anticipated April 27th target action date for its investigational candidate, Protalix Biotherapeutics, Inc. (NYSE:PLX) announced that the FDA had issued a Complete Response Letter (CRL) related to the submission of PRX-102.1 Protalix and Chiesi Global Rare Disease submitted the Biologics License Application (BLA) for the PEGylated enzyme and received acceptance of receipt in August 2020. Priority review was granted which normally provides for a six month appraisal of the BLA. Initially, the FDA issued a target action date of January 27, 2021, but in late November extended the date to April 27.
An ongoing outstanding item related to PRX-102 approval has been the required inspection for Protalix' manufacturing facility and that of a third party that performs fill and finish processes. Due to pandemic
-related travel restrictions, inspections have been delayed, especially those performed overseas. It had been unclear if the agency would temporarily waive the inspection due to the unmet need for Fabry patients and the backlog the agency has for inspections on account of the pandemic.
In a follow up press release on April 28th, Protalix provided additional details on the contents of the CRL. The FDA did not raise any issues related to the safety or efficacy of the drug, but rather attributed the unfortunate letter to its inability to conduct an on-site inspection for the manufacturing facility in Israel and ongoing review of the third-party facility in Europe.
Protalix' April 28th communication indicated that primary competitor Fabrazyme was recently converted to full approval, which, for nearly 20 years, was approved based on surrogate endpoints. This is important as it may alter PRX-102's priority review designation – a status granted to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists. Priority review is provided to drug candidates that show evidence of significant improvements in safety or effectiveness when compared to standard of care. Now that Fabrazyme is fully approved, PRX-102 may no longer be eligible for expedited status, which could raise the hurdle required for approval. Despite this, we believe that the evidence presented so far strongly supports the approval of PRX-102.
FDA CRLs Have Become Common
Several CRLs have been issued recently. While we have not reviewed them all, we do believe that their frequency is indicative of an FDA that has too many obligations and insufficient resources to comply with its mandate. There have been a number of delays to initial target action dates attributable to what we believe to be demands on the agency related to the pandemic and the allocation of resources to this global predicament. As COVID vaccines take their effect, the impact from the pandemic lessens and travel resumes, we anticipate the FDA will catch up. However, we believe outstanding submissions for all sponsors are at greater risk of delay independent of the safety and efficacy of the underlying drug.
We performed a quick review of PDUFA calendars examining the outcomes related to the assigned PDUFA dates. Since January 1st, we identified 29 target action dates with at least 11 of them either receiving a CRL or no response from the FDA on the indicated date. The trend appears to have worsened over the last 30 days with eight of ten PDUFA dates missed, CRLed or delayed.
Next Steps
Following the issuance of a CRL, there are several steps that are common for all candidates. The sponsor has 90 days following the issuance of a CRL to schedule a Type A meeting with the FDA to cover any questions related to the letter. When the sponsor makes the request, the FDA has 30 days to hold the meeting, after which notes from the gathering will be provided. Explained in the CRL and clarified in the meeting, the FDA will outline the steps needed to address the discrepancies presented. In general, these could include additional trials, further questions, bridging studies among other needs. When the requested deliverables are ready, the sponsor may then resubmit the application which will then be considered a Class 1 or Class 2 resubmission. A Class 1 resubmission offers a two month turnaround time and generally deals with simpler issues such as labeling, stability and safety updates, discussion of post-marketing requirements, assay validation data, minor reanalysis, final release testing or other minor issues. A Class 2 resubmission is any item that does not fall under Class 1 and/or requires presentation to an advisory committee and requires a six month turnaround time.
Based on our reading of the press release, it appears that the only discrepancies that exist are related to FDA inspections. Solving the discrepancies appears to be outside of the influence of Protalix and in our opinion not a justification for a CRL. We have noted that the FDA appears to have insufficient resources to meet its mission according to the timelines and performance benchmarks required by the Prescription Drug User Fee Act (PDUFA). Given these limitations, the agency appears to be forced to issue a CRL when it is unable to comply with the requirements for approval.
Normally, we anticipate a several month delay to the approval process when a CRL is issued. In this case it appears that addressing the defect relies on the FDA performing an on-site visit. Assuming that the inspection could take place in the next two months, followed by a resubmission the subsequent month and classification as a Class 1 resubmission, there is a minimum of five to six months before an approval could be granted. This timeline could be extended and we expect further clarity on this matter following the notes from an anticipated Type A meeting.
Clinical Trial Results for PRX-102
PRX–102 is a recombinant α-Galactosidase-A enzyme. Protalix uses its ProCellEx platform to express the enzyme and then chemically modifies it via surface pegylation. Protein sub-units are covalently bound via chemical cross-linking using short PEG moieties, resulting in a molecule with unique therapeutic longevity in the body. In clinical studies, PRX–102 has demonstrated a circulatory half-life of approximately 80 hours. Due to the chronic nature of Fabry, patients must receive IV infusion of enzyme replacement therapy every two weeks, which is a significant burden. PRX-102, with its extended half-life, aims not only to be more effective, but also reduce the frequency of doctors' visits by Fabry patients.
Three Phase III studies were launched to support regulatory approval of PRX-102 around the globe, designated BRIDGE, BALANCE and BRIGHT. After a release of topline results in May 2020, the BRIDGE trial provided final results on December 30, reiterating its findings of a substantial improvement in renal function. See our March 31 report for details on trial outcomes.
We expect to see interim results from the BALANCE study in the next few weeks and no later than mid-May. The data will remain blinded but safety is expected to be confirmed in the head to head, double blind study in comparison with Fabrazyme. Confirmation of safety in this 78-subject trial will provide additional support for regulatory approval and full results, if favorable, may provide justification of favoring PRX-102 over Fabrazyme.
Summary
We are disappointed to see the issuance of a CRL for PLX-102 and believe that the delay is attributable to the lack of sufficient resources at the FDA. Our perspective is founded on the information provided in Protalix' follow up press release, on other delays we have seen to target action dates and the high number of CRLs issued to other sponsors.
While this is definitely a bump in the road for Protalix, it does not appear to be related to the safety or efficacy of PRX-102, but rather to the FDA's inability to perform an on-site inspection due to pandemic-related travel restrictions. We are hopeful that the issues will be addressed in a matter of months, but we do need additional clarity that should be available following the anticipated Type A meeting between Protalix and the FDA. As for now we will reserve judgment until further information is available. In our experience, the hit to valuation for a delay of several months is minimal as long as the probability of ultimate commercialization is not impaired.
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1. Also referred to by its generic name, pegunigalsidase alfa.
2. FDA Calendar – FDA Tracker, Zacks Analyst Research
3. Protalix Corporate Presentation March 2021
4. Source: Protalix 2020 Form 10-K
