DBV Technologies may have a hard time overcoming its latest setback. On Tuesday, the small French biotech said the Food and Drug Administration had rejected its peanut allergy treatment because of design issues. The agency indicated the patch needs modifications and then more clinical data to prove it works — requests that could take years to address and further strain the already cash-strapped company.
According to DBV, the agency couldn't approve the Viaskin Peanut desensitizing patch in its current form, due to concern the patch wouldn't be as effective if not fully adhered to the skin. Once DBV fixes this issue, the company said the FDA requested it runs another "human factor" study to see how patients use the patch. Regulators also asked for more data on Viaskin Peanut's manufacturing processes and performance in clinical testing.
The rejection itself wasn't a total shock to analysts, given the challenges DBV has faced getting its patch approved. In late 2018, the company voluntarily withdrew the approval application for Viaskin Peanut after receiving feedback from the FDA that it lacked crucial manufacturing and quality control data. After resubmitting the application, DBV disclosed in March that the agency had questions about the patch's efficacy and adherence to the skin.
The scope of the rejection, however, took some by surprise. DBV said it plans to request a meeting with the FDA to discuss its feedback and requirements. But if the rejection letter is any indication, DBV may have to tweak the patch's design and dig up a wide variety of additional data.
"While we previously had thought there was a glimmer of hope for Viaskin Peanut ... it now appears that the FDA had larger concerns regarding the EPIT patch efficacy," Joseph Schwartz, an analyst at SVB Leerink, wrote in an Aug. 4 note to clients, referring to the immunotherapy technology DBV used to make the patch.
Peanut allergy is the most common in the United States, affecting about one in every 100 people. For some of these patients, even small amounts of peanut antigen can cause life-threatening anaphylaxis.
DBV's patch delivers a small amount of peanut antigen through the skin in order to desensitize patients. The patch is applied each day to a patient's upper back, and is worn progressively longer as treatment continues.
In 2017, a large clinical trial that was crucial for showing Viaskin Peanut's merit didn't meet its main goal. That, according to Schwartz, was one of the "missteps" from DBV's former management that are now "coming back to haunt the current company." DBV appointed a new CEO, Daniel Tassé, about a year after the negative readout.
By late June of 2020, DBV had almost 230 million euros, or roughly $270 million, in cash and cash equivalents, and had decided to restructure to cut costs and keep the business afloat.
The new requirements from the FDA, though, are likely to be expensive, according to analysts from Stifel. The investment bank now expects DBV to have enough cash to operate until late 2021 or early 2022, which would mean the company would need to raise more money.
DBV shares were down about 40% Tuesday morning, to $2.40 apiece. Meanwhile, Aimmune Therapeutics, which recently launched a rival peanut allergy treatment called Palforzia, initially saw its share price rise about 7%, before further trading pared back those gains.
Though Palforzia cleared the FDA, the coronavirus pandemic prevented the drug from having any U.S. sales during the second quarter, as allergists shuttered offices and patients reduced their medical visits.
Analysts at Piper Sandler expect the drug's performance to improve, albeit slowly. They model U.S. Palforzia revenue of $2 million for the third quarter, $8 million in the fourth quarter, and then $150 million and $387 million for all of 2021 and 2022, respectively.