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Aradigm Receives Complete Response Letter from the FDA for Linhaliq NDA

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Aradigm Corporation (NASDAQ:ARDM) (the "Company") today
announces that it received a Complete Response Letter (CRL) from the US
Food and Drug Administration (FDA) regarding its New Drug Application
(NDA) for Linhaliq™ as a treatment for non-cystic fibrosis
bronchiectasis (NCFBE) patients with chronic lung infections with Pseudomonas
aeruginosa
(P. aeruginosa).

The CRL states that the FDA has determined that it cannot approve the
NDA in its present form and provides specific reasons for this action
along with recommendations needed for resubmission; the areas of concern
include clinical data, human factors validation study and product
quality.

The recommendations in the CRL include an independent third party
verification of the Phase 3 results via analyses of source data as per
the statistical analysis plan and an additional Phase 3 clinical trial
that demonstrates a significant treatment effect on clinically
meaningful endpoints which could evaluate the co-primary endpoints of
frequency and severity of exacerbations to assess for durable evidence
of efficacy over a period of two years (or more, if scientifically
justified). The CRL also included a request to conduct another Human
Factors Study to demonstrate that the product packaging and instructions
for use are effective, and the CRL requested, among other things,
additional product quality information with respect to microbiology and
a new in vitro drug release method development report.

"We remain confident in the efficacy, safety and quality of Linhaliq and
will request a meeting with FDA to discuss the topics covered in the CRL
with the view to developing plans to move towards resubmission of the
Linhaliq NDA as soon as possible. We are committed to continue working
on the approval of Linhaliq for NCFBE patients who have very severe
disease with high morbidity and mortality and no available treatment
options. We thank these patients and their care givers for participating
in a decade of clinical research that brought us to this point,"
said Igor Gonda, Ph.D., president and chief executive officer at
Aradigm. "Our focus is also on the submission in the near future for
marketing approval in the European Union."

The Linhaliq application was based on data from three clinical studies.
Two Phase 3 studies, ORBIT-3 and ORBIT-4, were identically designed,
multinational, randomized (2:1), double-blind and placebo controlled.
Both were conducted concurrently in similar geographies over 48 weeks,
with an additional 4 weeks of open-label treatment and a 30-day safety
follow up. Together with the Phase 2b ORBIT-2 study, these trials were
part of the NDA submission to provide evidence of the clinical benefit
of Linhaliq for patients with NCFBE who have chronic lung infections
with P. aeruginosa.

About Non-Cystic Fibrosis Bronchiectasis (NCFBE)

NCFBE is a severe, chronic and rare disease characterized by abnormal
dilatation of the bronchi and bronchioles, frequently associated with
chronic lung infections. It is often a consequence of a vicious cycle of
inflammation, recurrent lung infections, and bronchial wall damage.
NCFBE represents an unmet medical need with high morbidity and mortality
that affects more than 150,000 people in the U.S. and over 200,000
people in Europe. NCFBE patients who have chronic infections with P.
aeruginosa
have a 6.5-fold increase in hospitalizations, three times
higher mortality, and a worse quality of life compared with those
without P. aeruginosa infections. There is currently no drug
approved for the treatment of this condition.

About Aradigm

Aradigm is an emerging specialty pharmaceutical company focused on the
development and commercialization of drugs for the prevention and
treatment of severe respiratory diseases. Aradigm has completed two
Phase 3 clinical trials with Linhaliq, an investigational proprietary
formulation of ciprofloxacin for inhalation, for the treatment of NCFBE.
Aradigm's inhaled ciprofloxacin formulations, including Linhaliq, are
also product candidates for treatment of patients with cystic fibrosis
and non-tuberculous mycobacteria (NTM), and for the prevention and
treatment of high threat and bioterrorism infections, such as inhaled
tularemia, pneumonic plague, melioidosis, Q fever and inhaled anthrax.

Forward-Looking Statements

Except for the historical information contained herein, this news
release contains forward-looking statements that involve risk and
uncertainties, including the risk that Linhaliq may not receive
regulatory approval or be successfully commercialized, as well as the
other risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission (SEC), including the Company's Annual
Report on Form 10-K for the year ended December 31, 2016 filed with the
SEC on March 30, 2017, and the Company's Quarterly Reports on Form 10-Q.

More information about Aradigm can be found at www.aradigm.com.

Aradigm and the Aradigm Logo are registered trademarks of Aradigm
Corporation. Linhaliq is a registered trademark of Grifols, S.A.

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