Translating FDA for Investors: Seattle Genetics Shrugs Off Public Lambasting at ODAC

Actions speak louder than words. That, at least, is how Seattle Genetics urged investors to think about a tongue lashing the company received during an advisory committee review of the cancer agent Adcetris Seattle Genetics may be right on two levels: the practical outcome of the meeting was positive, and the FDA rhetoric may not have been as directly aimed at the sponsor as a warning to all oncology drug developers.

Cole Werble

July 20, 2011

When the head of a Food & Drug Administration new drug review office publicly admonishes a sponsor to show the agency a "comprehensive drug development program…not one randomized trial," to engage with FDA in "a frank discussion about which of the trials would make the most sense," or else risk missing a fast approaching review deadline, how would you characterize the message?

Seattle Genetics Inc. CEO Clay Siegall says it is just "regulatory language" – a way that FDA officials express themselves that is "not necessarily the same as all other language."

Siegall's ability to look past a day of unusually acrid criticism of Seattle Genetics' drug development program for Adcetris (brentuximab vedotin) demonstrates a pragmatic view that FDA's actions speak louder than its words; a thick skin; an insensitive ear—or some combination of all three.

The Seattle Genetics CEO offered his interpretation of harsh comments from FDA's head of the Office of Oncology Drug Products, Richard Pazdur, during a conference call with investors at 8:30 AM on July 15, the morning after a verbally tough but productive session for Adcetris at the Oncologic Drugs Advisory Committee. The timing of the call itself, in fact, communicated the sponsor's view that FDA's words are not to be taken literally, since during one exchange the day before Pazdur had invited Seattle Genetics to call him at 9 am the next morning. ( See " Who You Gonna Call? ")

Rather than dwell on Pazdur's hectoring about confirmatory trial designs, Siegall focused on the outcome of the meeting: two unanimous votes in favor of accelerated approval for Adcetris for Hodgkin Lymphoma and Anaplastic Large Cell Lymphoma. And he downplayed a litany of critical comments from Pazdur about the sponsor's unwillingness to listen to FDA about the appropriate route for initial approval of the product.

Approval of the drug in any form is of course the most important issue for investors, so in that sense Seattle Genetics is right to downplay the rhetoric and focus on the outcome.

But investors should be wary of any attempt to explain away Pazdur's remarks altogether: FDA's oncology chief is clearly sending a message to drug sponsors in general about the right way to approach accelerated approval. And any sponsor that mistranslates that message risks a potentially significant setback at the agency.

Frustration Over Pathways

Pazdur made clear during the ODAC review the real point of the meeting: the agency, he said, advised Seattle Genetics for almost three years that the drug would be considered initially for accelerated approval and not full approval based on its single-arm trials for the initial two indications, but the sponsor pushed for full approval.

FDA wanted the committee to weigh in on which path—full or accelerated?—would be appropriate. And in particular FDA wanted leverage to demand full engagement from the sponsor on the design of post-marketing studies that would be necessary to confirm accelerated approval.

The oncology office director ended the advisory committee review with a strong statement of frustration at the sponsor's previous decisions and a clear call to the company to meet FDA's requirements for randomized, confirmatory trials with FDA-selected endpoints. Failure to heed the message, Pazdur suggested, might mean a delay getting to market.

Pazdur noted that FDA views the antibody-drug conjugate as a very promising compound: "nobody is denying that."

However, Pazdur said, the agency hasn't been able to get the sponsor to focus on the appropriate package of confirmatory trials necessary for accelerated approval.

"We have been – since 2008 – on the record with this company with our intentions of going on accelerated approval," Pazdur said. "Obviously, we did not reach agreement on the Phase III trial [AETHERA] that they are doing now and that was explicitly stated to them. Here again they had the ability to really modify that trial or propose other trials; they did not."

If the sponsor does not come to an agreement with FDA "on an appropriate pathway" following the meeting, Pazdur warned, "we will be bringing this back to the ODAC for further discussion of these trials."

This is not a situation in which the sponsor can just "rush a Phase II trial through," Pazdur explained. "We really want to have a discussion with the company on a comprehensive drug development program: exactly where they are going, what trials they plan on doing and what trials they plan on designating as confirmatory trials."

A Broader Audience

But Pazdur made it evident that he had a larger audience in mind than Seattle Genetics and those interested solely in Adcetris.

In the wake of the wide attention to the accelerated approval process in the struggle by FDA to remove Roche/Genentech's metastatic breast cancer indications for Avastin, Pazdur wanted to make two general points:

(1) Accelerated approval is still very much alive as an option for oncologics – indeed, in some cases it is a virtually non-negotiable obligation for sponsors; and

(2) The agency demands a firm commitment to a comprehensive package of post-marketing studies, with clearly defined deadlines for completion.

Pazdur closed the meeting by reinforcing that broad message. He recapped some of the conversations FDA has had with ODAC over the past decade regarding the accelerated approval process, noting that there have been three advisory committee meetings to look specifically at the criteria for accelerated approval, most recently in February.

"One of the central themes is that we look at the accelerated approval program as a comprehensive drug development program," Pazdur said. The decision to permit a drug on the market through accelerated approval is "not a one-off" decision. Sponsors who ask for approval and then think they can think about "confirmatory trials later" are missing the point of the process.

"We really want to see a comprehensive drug development program. It is not one randomized trial. It is really looking at a portfolio of trials that a company may want to do here and really have a frank discussion about which of the trials would make the most sense to be confirmatory trials," Pazdur said.

It is hard being the object-lesson to send a larger message, but Seattle Genetics seemed to recognize that they may have been receiving the regulatory equivalent of a public flogging to send a message rather than to punish them for their failure to develop Adcetris according to FDA's plan.

Seattle Genetics Interprets the Message

Here is how Seattle Genetics translated Pazdur's "regulatory language" for investors.

First, the company's failed attempt to get a full, regular approval for the two indications in the face of FDA advice has not adversely impacted the progress of their application towards commercialization.

"Where we ended up was in exactly the same spot as if we went for accelerated approval," Siegall contended. "If we had gone for accelerated approval, we would be having discussions with the agency right now for coming up with the appropriate confirmatory trials. We went after full approval; we did not get it. We got accelerated approval but we got two unanimous decisions."

The votes at the committee are a "phenomenal outcome and we ended up in the exact same spot," he declared.

In fact, Siegall argued that had the company taken the reverse strategy of going for accelerated approval and gotten the same 10-0 votes, then it would have faced criticism from the financial community for failing to seek full approval.

The Seattle Genetics CEO told Rachel McMinn from Merrill Lynch that "I can see right now that you or other analysts would [have said]: 'How come you didn't go for regular approval? Why didn't you do it? There are two other drugs that got it.'"

Siegall's message, in effect, was that FDA's words do not matter; just the result: "The PDUFA date did not change. We have the same timing, the same everything. We have our full plans to do a global development package. We do not feel that our timelines are any different. "

About half of the dozen analysts on the post-meeting call began their questions with open congratulations to Seattle Genetics, appearing to accept the view that the accelerated approval vote was the significant outcome, not the expression of frustration from FDA.

However, the Street also understands a distinction between words and actions. The market was not as nearly as accepting of the outcome as the congratulatory rhetoric: the company's stock lost about 10% of its value, dropping after the meeting from trading above 20 per share to the 18 per share range on Friday.

Next Steps: New Indications?

Siegall suggested that despite the clear lack of understanding between sponsor and regulator to this point, the final negotiations of confirmatory trials would not be a problem – even given the tight review deadline of Aug. 30.

There are certainly a number of potentially attractive options on the table, even if Seattle Genetics will likely have to give up on the idea that its one ongoing trial (AETHERA) will be sufficient to serve as a confirmatory study.

Siegall pointed out that Pazdur suggested that the sponsor undertake development in other CD30-positive disease states. To Siegall, that translates as a "two-fer": a chance to continue on with development into a new disease setting while confirming the accelerated approval. While not calling it a two-fer, Pazdur indicated as much during the meeting.

One of the advisory committee members, Mikkael Sekeres (Cleveland Clinic) suggested that Seattle Genetics might examine the ability of brentuximab to help patients survive Hodgkin Lymphoma until they might qualify for stem cell transplant, data that would essentially move the biologic from a role as an active therapy to a potentially curative one. Adcetris was studied by Seattle Genetics in relapsed or refractory Hodgkin patients who have received autlogous stem cell transplants.

That, though, was just one of the suggestions.

Other ideas from the advisory committee for further work ranged from studying it in relapsed patients who have not undergone transplants to head-to-head versus transplant. The extent of the options and the likelihood that the major ongoing trail, AETHERA, will be difficult to modify to meet FDA objectives indicates the hurdle facing the sponsor.

The size of the initial patient population for the two indications is not large, with the company estimating it at 8,000 to 9,000 patients (three quarters in Hodgkin and one-quarter in ALCL). That may prove to be a small group to spread out the cost of the trials that FDA may require.

One analyst asked if further work in ALCL might be a good route to confirmatory work. Siegall suggested that is a possibility. "One of our trials is that we are looking at the label expansion in frontline ALCL. That is going to end up being a randomized study and we're pretty excited about going forward there. We're in a Phase I trial right now and that is going to be part of our FDA discussion," Seigall declared.

Speaking the Same Language?

The major obstacle between Adcetris and commercialization is the willingness of Seattle Genetics to understand the messages – or regulatory language, in the company's phrase –coming from FDA.

One of the analysts on the July 15 phone call, Merrill Lynch's McMinn, pointed out that the tone of the meeting suggested a big disconnect between the sponsor and FDA. The analyst questioned whether the sponsor understood the message that FDA was sending and conveyed it correctly to Wall Street.

"Why did you not disclose that you filed for regular approval and went against the FDA's advice? " McMinn asked.

Siegall replied: "You are suggesting something that is not true: that we went against the FDA's advice. That is not true. We talked to the FDA about submitting regular approval and accelerated approval and the FDA – we feel they said to go forward as we see best."

McMinn pressed Siegall further. "They said specifically at the pre-BLA meeting that this is an application for accelerated approval. You ignored that and filed for regular approval. You didn't tell anybody but guided people to expect accelerated approval. I guess I just don't understand the thought process there."

That led to an answer from Siegall that should give investors pause, since it suggests that Seattle Genetics may not have understood the difference between a suggestion from FDA and something more like a regulatory requirement: "The FDA clearly told us that it was likely to be accelerated, but did not discourage us from submitting for regular approval. That is what it was."

Balancing that apparent lack of comprehension is another, more astute step outlined during the July 15 conference call. Seattle Genetics did not file for accelerated approval, but was aware enough of FDA's position to recognize that it would be prudent to follow the extra advertising review requirements for AA products. "We planned as if we were doing accelerated approval and working with" FDA's ad division, Seigall said.

In the long-run, Seattle Genetics likely has a compound that can survive a tongue lashing. If the sponsor engages FDA and works more cooperatively on its future development plans for the compound, it should be on the US market in the early fall.

If other sponsors listen to Pazdur's message in "regulatory language" to Seattle Genetics, accelerated approval should remain a viable and active option in oncology. The only danger is if that message is somehow lost in translation.