Memorandum

Intarcia stops two commercial trials for ITCA 650 early due to clinical hold/lab investigation; 60 employees let go in company restructuring; Now hiring for positions in technical operations – February 7, 2018

Executive Highlights

  • Intarcia recently terminated two clinical trials of ITCA 650 (implantable exenatide mini pump). A third-party lab conducting routine tests had an isolated out of spec (OOS) observation on two devices, though this OOS was not observed in any prior batches. As expected, management emphasized to us that any lab OOS result requires immediate and comprehensive investigation to clarify the unexpected observation. The clinical hold was put in place shortly after Intarcia initiated the investigation, and that process was completed just recently. The company plans to fully update FDA to address the OOS and clinical hold this year. The terminated studies include an open-label trial (n=30) in type 2 patients with high baseline A1c and a head-to-head (n=930) of ITCA 650 vs. SGLT-2 Jardiance (empagliflozin) vs. SU glimepiride. Notably, these were commercial trials designed to support marketing/promotion of the product post-approval – they were not pivotal trials and shouldn’t affect approval prospects. That said, this is disappointing news on the heels of the FDA’s Complete Response Letter for ITCA 650 issued in September 2017.
  • Intarcia is also in the process of restructuring and reshaping certain functions, and to this end, laid off 60 employees last week. Eleven of these employees worked at the Boston headquarters, others had field-based roles, and the remainder worked at the manufacturing facility in Hayward, California. In parallel, the company is hiring in multiple positions, primarily in the area of technical operations. Management communicated that Intarcia’s total headcount will remain roughly the same over the year, at just above 300.
  • We remain hopeful that ITCA 650 will be resubmitted to FDA soon, certainly sometime in 2018. This product would bring meaningful innovation to the GLP-1 agonist class, offering impressive glucose-lowering and weight loss benefits without the hassle of injection burden. Separately, we’ve heard that Intarcia wouldn’t have to deal with PBMs in pricing and distributing ITCA 650, which could help expand early access. The company initially filed its 1.3 million-page (!) NDA in November 2016, before the CRL was announced in September 2017.
  • We believe we underestimated how complex this NDA would be – as a medical/device combination product, which also includes procedure kits and human factors, this submission went to all relevant subgroups in CDER, CDRH, and also involves the office of combination products (OPQ). We just published the GLP-1 pooled data earlier today, and we're incredibly impressed at how fast the market is growing. 

News came over the wire last week that Intarcia has laid of 60 employees as part of a company restructuring. In addition, two clinical trials of implantable exenatide mini pump ITCA 650 have been terminated due to a recent clinical hold required to allow an investigation to take place at a third-party lab conducting routine long-term tests of manufacturing batches. While both announcements seem negative for Intarcia following the FDA’s Complete Response Letter (CRL) last September, the restructuring could help prepare the company to resubmit ITCA 650 in 2018.

Indeed, while making cuts in certain areas (11 individuals who worked at the Boston headquarters, many others who worked at the California manufacturing facility), Intarcia is actively hiring for other open positions right now. CEO Mr. Kurt Graves has suggested that the company’s total headcount, ~300 employees, will not change meaningfully in the restructuring.

The two terminated studies include a small, open-label 30-person trial investigating ITCA 650 in type 2 diabetes patients with high baseline A1c (between 10%-12%) and a large head-to-head trial (n=930) comparing ITCA 650 vs. SGLT-2 inhibitor Jardiance (Lilly/BI’s empagliflozin) and vs. SU glimepiride.

Notably, these were commercial trials that would support marketing/promotion around Intarcia’s product post-approval – they were not pivotal studies and shouldn’t have any influence on ITCA 650 review and potential approval. Since the lab OOS and clinical hold seem entirely separate from the earlier CRL, we don't know whether the FDA’s hesitation to approve this GLP-1 agonist therapy the first time around had anything to do with this. Nonetheless, we can imagine that Intarcia will work swiftly to address these pump-related concerns and to relaunch the trials, since management has maintained fierce commitment to getting ITCA 650 approved and out there for people with diabetes. The head-to-head could provide especially compelling data, if it highlights the exenatide mini pump’s superiority over one of the most advanced type 2 diabetes drugs on the market today (Jardiance) and over one of the most commonly-prescribed therapy classes today (sulfonylureas).

ITCA 650: Innovation in the GLP-1 Class

  • As background, Intarcia filed a 1.3 million-page NDA for ITCA 650 in November 2016. There’s clearly a remarkable amount of detail required in submitting a drug/device combo that’s brand new, unlike anything else on the market. The NDA covered the exenatide molecule, all aspects of Medici technology (implantable device, high-temperature stability components), placement/removal kits for the mini pump, and a range of human factors that become relevant with a combination of drug and device. We understand that FDA has its work cut out to thoroughly review all aspects of safety/efficacy, which may have contributed to the September 2017 CRL. We have our fingers tightly crossed for resubmission soon and a swift approval after that. If Intarcia re-files by mid-2018 or 2H18, an FDA decision would be expected within six months, which means the product could reach the US market in 2019. To be sure, ITCA 650 would be revolutionary for people with diabetes, offering all the important benefits of GLP-1 therapy (effective glucose-lowering, profound weight loss) without the hassle of injection burden. The mini pump is implanted into the abdomen and exenatide is released subcutaneously for three-six months (initiation phase and maintenance phase). Separately, we’ve heard that Intarcia wouldn’t have to deal with PBMs in pricing and distributing ITCA 650, which could help expand early access. Despite recent setbacks, including the CRL and disappointing trial terminations, we continue to believe that Intarcia will bring exciting innovation to the GLP-1 agonist class in the next year or two.

 

-- by Payal Marathe and Kelly Close