[Reporter’s View] We don’t know the fate of rivoceranib

It’s too early to know the result just baased on FDA's issuance of a CRL

On the 17th, The US Food and Drug Administration issued a complete response letter (CRL) for HLB and Chinese Jiangsu Hengrui Pharmaceuticals’ frontline camrelizumab plus rivoceranib as a treatment for those with unresectable or metastatic hepatocellular carcinoma (HCC).

 

Immediately after the news broke, HLB's stock price plummeted.

 

The stock price, which was KRW 95,800, hit the floor for two days in a row, halving to KRW 47,000.

 

Its market cap evaporated by more than KRW 630 billion in 2 days.

 

As investors had high expectations for the company, which once recorded the second-largest market cap on KOSDAQ, the disappointment was as great.

 

However, its stock has since rebounded, especially on the 27th and 28th, rising by more than 10% for two consecutive days and recovering to the KRW 63,500 level.

 

The analysis is that HLB's strong claim that the FDA's approval was only delayed due to the facility issue at Jiangsu Hengrui Pharmaceuticals and that there is no problem with its final approval, has brought back the investors' attention again.

 

Interpretations of the companies’ CRL receipt had been mixed.

 

Some have said that the FDA "denied" the approval or that the companies have "failed," while others say the approval was just "delayed" or "pending.

 

There is no special meaning to a CRL.

 

It doesn't mean that the possibility of an FDA approval is long gone or that your approval is assured.

 

Receipt of a CRL literally means that the FDA has requested a supplement to the application.

 

Of course, as HLB claims, many new drugs have crossed the FDA threshold after receiving a CRL.

 

HLB and Jiangsu Hengrui Pharmaceuticals plan to reapply for the FDA’s approval.

 

They plan to resolve the facility issues that were pointed out as the reason for the CRL and try again.

 

The exact time of the reattempt was not disclosed, but the industry expects the companies to reapply 'soon.’ We cannot predict whether the reattempt will end a success or failure.

 

While many factors favor a positive outcome, there are also clear factors that point to a negative outcome.

 

According to HLB claims, the CRL was unrelated to the efficacy and safety of the combination therapy.

 

If so, this means that the combination therapy’s longest overall survival (OS) data compared to competing drugs is acceptable.

 

In this case, the reapplication would only need to address the Jiangsu Hengrui Pharmaceuticals’ facility issues that caused the CRL.

 

However, it is different if there are other causes besides the facility issue.

 

In the past, the pharmaceutical industry has criticized the camrelizumab plus rivoceranib combination trial for not being double-blinded and for having a disproportionately large number of Asian patients.

 

There are also other variables beyond the clinical and facility issues.

 

One risk is that the US has been slow to approve new drugs from China for political reasons.

 

The US recently passed the Biosecure Act, which actively restricts activity by Chinese pharmaceutical companies.

 

Furthermore, the imminent release of clinical data of a potential competitor, the Opdivo plus Yervoy combination as a first-line treatment for liver cancer, also renders it difficult to be optimistic about the outcome.

 

HLB Chairman Yang Gon Jin called the CRL a "double hit" for the company.

 

However, it's too early to assess whether it's a double or a triple hit based solely on the FDA’s rejection or delay of approval.

 

The ball hit by the HLB is still in flight.

 

At this point, the ball could go over the fence or be out.

 

Even if the FDA approves the product, the approval by itself would be hard to call a success.

 

While it's clear that crossing the FDA's threshold is very difficult, it shouldn't be the ultimate goal.

 

It’s as important to have a vision of how to commercialize the product after approval.

 

So from various aspects, it is clear that it is too early to call rivoceranib a success or a failure, just based on the receipt of the CRL.