This morning, Fennec (FENC) announced that the FDA had granted the company’s candidate, Pedmark, Breakthrough Therapy Designation for the prevention of cisplatin-related ototoxicity in pediatric patients with standard risk hepatoblastoma. This designation came soon after the company announced Fast Track designation last week. Fennec shares were up 12% in pre-market trading.
The news this morning is especially significant because the FDA has reviewed the company’s safety/efficacy data and given the nod. Remember, there were some safety concerns in the first Phase 3 study that Fennec ran (ACCL0431), indicating that Pedmark may intervene with the anti-tumor activity of cisplatin. These safety concerns were lifted with the second study (SIOPEL 6), which showed Pedmark was effective and safe to administer in localized cancers.
The FDA has essentially verified this data with Breakthrough Therapy designation. We think Fennec is on way to getting approval. In our view, Phase 3 data and the two recent designations are pointing to an approval from the FDA. Additionally, the company’s management and board are comprised of individuals with successful exits in rare diseases (read more here). We think the company will be putting itself up for sale and expect a takeout value of around $20/share.
What is Difference between Fast Track & Breakthrough Designation?
Both Fast Track & Breakthrough designations are intended to expedite the development and review of drug applications. These programs essentially allow a company to have closer interaction with the FDA during the development/review process than the company would have had otherwise.
The most significant difference between the two is the type of data required. Fast Track can be granted based on preliminary data (including preclinical data). However, Breakthrough Therapy designation requests must use clinical data. Preclinical data alone would not be sufficient for Breakthrough designation.
In short, Breakthrough Therapy Designation is one step further as the FDA has reviewed the clinical data Fennec has presented.
What else can Fennec be eligible for?
Priority Review Designation: FDA’s goal is to take action on a NDA application within 6 months (compared to 10 months under standard review). FDA informs the applicant of a Priority Review designation within 60 days of the receipt of the NDA.
- FDA granted Fennec's Pedmark Breakthrough Therapy Designation this morning. This came a week after Fast Track Designation.
- Remain LONG Fennec; we think fair value is $20
One or more of PropThink's contributors are Long FENC
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