An unusual amount of activity around the Immunomedics 483 started at the beginning of December 2018 and continued into February. Capital management firms made the majority of purchases, so we knew something must be amiss. If you’re unfamiliar with Immunomedics, it’s a clinical-stage biopharmaceutical company developing monoclonal antibody-based products for the targeted treatment of cancer.
Knowing this could be big, we decided to keep digging. Here is what we found.
Immunomedics FDA Inspection History
According to the FDAzilla database, Immunomedics has been inspected at their Morris Plains, NJ facility only four times since 2001. Unfortunately, all four resulted in receiving 483s—a 100% issuance rate not commonly found.
The first two inspections occurred in 2001 and 2003 with the final two happening within two weeks of each other ending in August 2018.
The Class Action Lawsuit
According to one lawsuit, Immunomedics stated in its SEC filings that, “the FDA generally will issue a notice on Form 483 if it finds issues with respect to its inspections.”
This statement was misleading to investors in that it downplayed the importance of the actions by the FDA, especially since the findings imply data integrity issues and potential falsification of data by the company.
A data integrity breach is a big concern since it could involve fraud. And, as indicated in the FDA 483, once Immunomedics discovered the problem they did not go back and expand the scope of the investigation to ensure that other batches were not involved.
The 13 observations in the latest 483 include equipment cleaning, air flow (differential pressure), raw material handling and supplier issues (get the full 483 here). This is a very wide review and uncovered substantial issues in many areas. This is not just a minor issue as highlighted in the SEC report.
As you can imagine, news of these concerns cited by the FDA caused shares of Immunomedics to drop—falling $0.87 per share or approximately 4.6% to close at $17.86 per share on December 17, 2018—resulting in quite a bit of damage to investors.
And then, a CRL…
In addition to the class action lawsuit, Immunomedics received a complete response letter (CRL) from the FDA about manufacturing concerns surrounding sacituzumab govitecan, an inspectional antibody-drug conjugate being developed by Immunomedics for breast cancer.
After news of the CRL issue, shares of Immunomedics dropped 30% that day.
In a company-issued press release, President and CEO Michael Pehl stated, “The issues related to approvability in the [complete response letter] were exclusively focused on chemistry, manufacturing and control matters, and no new clinical or preclinical data need to be generated. We are going to request a meeting with the FDA as soon as possible to gain a full understanding of the agency’s requirements and timelines for approval, and we will work closely with the FDA with the goal of bringing this important medicine to patients as soon as possible.”
FDA stated that no new studies will be needed in response to the CRL.
After fifteen years of zero FDA enforcement activity, Immunomedics was hit hard not once, but twice. The second punch, unfortunately for Immunomedics, was concerning enough to thrust them into the spotlight, causing their stock to be sold and their shares to plummet.
When the FDA takes new or unusual enforcement action, it is important that similar firms take notice immediately and remediate any similar deficiencies in their procedures and practices. In this case, other drug manufacturers should pay particular attention to the way they handle their data to avoid a similar fate.
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