Shares of Evoke Phama [NASDAQ:EVOK] plunged 60% after trading began on March 4 as the company disclosed it had received a multi-disciplinary review (DR) letter from the FDA regarding Gimoti, its drug to treat diabetic gastroparesis. The FDA previously assigned an April 1 PDUFA date to render an approval decision on Gimoti.
Sending a DR to Evoke four weeks before the PDUFA date is an unusual move by the FDA. Typically, the agency waits until the PDUFA date and delivers an approval decision, as happened with the SanaCurrents portfolio company Evolus, Inc. [NASDAQ: EOLS] on February 1. Or the agency often issues a complete response letter (CRL), which delays approval until deficiencies are corrected.
Gimoti is a nasal spray formulation of metoclopramide, the only drug currently approved in the United States to treat diabetic gastroparesis. To prepare for the PDUFA decision, Evoke had to demonstrate it could manufacture Gimoti to the bioequivalence of metoclopramide. The DR letter of March 4 said the company has yet to meet that requirement, citing concerns about the Evoke’s chemistry regarding product quality control and reproducibility,
Because the FDA often addresses these issues through a CRL on the PDUFA date, the DR letter suggests the FDA is pushing Evoke to improve its application quickly. While the best case would be for Evoke to correct the problems by April 1, Evoke cautioned “approval of Gimoti by the PDUFA date is uncertain given the [DR] letter.”
If Evoke can address some of issues prior to April 1, however, the anticipated CRL could be less severe. A type 2 CRL, which would result in about a 9-month delay of Gimoti approval, should not be a surprise on April 1.
Sending an early DR letter is consistent with the FDA’s interaction with Evoke. As published previously by SanaCurrents, Gimoti faltered in 2016 because of poor phase III results. The FDA, however, proved to be quite accommodating with Evoke in working to pluck out a sub-population of the trial. In that group, Gimoti demonstrated a statistically significant treatment effect in patients with moderate-to-severe symptoms.
Evoke appears to have more support from the FDA than previous companies with poor trial data, which still should improve the odds for Gimoti approval. But assuring the consistency and potency of manufacturing remains the responsibility of the company, and the DR letter demonstrates Evoke still has work to complete.
EVOK shares likely will be volatile in the next month but may push higher prior to April 1. Any increase in share price will be dependent on a quick response by Evoke management to re-establish its credibility for manufacturing problems it could have avoided if it had deployed its capital appropriately.