Orphazyme, CytRx Shares Slide as FDA Rejects Arimoclomol
June 18 2021 - 12:07PM
Dow Jones News
By Colin Kellaher
Shares of Orphazyme A/S and CytRx Corp. plummeted on Friday
after the U.S. Food and Drug Administration said it wouldn't
approve a proposed drug for the fatal genetic disease Niemann-Pick
disease type C, or NPC.
Orphazyme, the Copenhagen biopharmaceutical company developing
arimoclomol, said the FDA is requiring more qualitative and
quantitative evidence to support the application for its key drug
candidate.
American depositary shares of Orphazyme were recently down 41.4%
to $8.53, while shares of CytRx, the Los Angeles biopharmaceutical
company that sold arimoclomol to Orphazyme in exchange for
milestone payments and royalties, plunged 56.7% to $1.22.
Shares of both companies went on a wild ride last week amid a
so-called "meme-stock" frenzy ahead of the FDA decision, with
Orphazyme ADSs soaring as high as $77.77 and shares of OTC-listed
CytRx, which started last week at $1.43, rising as high as
$4.70.
The FDA rejection marks the latest setback for Orphazyme, which
last month said arimoclomol missed the main endpoints in a pivotal
trial in amyotrophic lateral sclerosis, the fast-moving, paralyzing
condition commonly known as Lou Gehrig's disease. That followed a
similar miss in March in the treatment of inclusion body myositis,
a progressively debilitating muscle-wasting disease.
Orphazyme said it now expects to post a loss of more than $100
million this year, compared with a prior forecast of a deficit of
$16 million to $24 million, and that it now expects to end the year
with about $8 million in cash, compared with a previously expected
cash pile of $56 million.
The company said it plans to cut costs and freeze spending not
related to its NPC efforts as it focuses on obtaining European
approval for the drug and on assessing the potential path forward
in the U.S.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
June 18, 2021 11:56 ET (15:56 GMT)
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