Orphazyme Stock Sale Reaps $83M as Neimann-Pick Drug Review Begins

Orphazyme has fresh cash from the sale of shares in the US and Europe, which will support its lead rare disease drug through regulatory review and, if approved, a launch. But the drug fell short in key clinical trial measures, raising questions about its approvability. Now the FDA wants additional data, potentially throwing a wrench into the review timeline.

Copenhagen-based Orphazyme, which is already publicly traded in Europe, made its US stock market debut by pricing its offering of more than 3.9 million American Depositary Shares late Monday at $11 apiece. At the same time, the company sold to a group of private investors an additional 3.65 million of its European-traded shares priced at Danish Krone 70.18. In total, Orphazyme raised about $83 million from the global securities offering. The company’s new US shares are expected to begin trading on the Nasdaq Tuesday under the stock symbol “ORPH.”

Orphazyme’s lead drug candidate, arimoclomol, has been submitted to the FDA for review as a potential treatment for Neimann-Pick disease type C (NPC), a rare inherited disorder that hinders the body’s ability to process and recycle fats, causing damage to body tissues including the brain. Orphazyme estimates that 1,800 patients in the US and Europe have NPC, which has no cure and can become fatal by the time patients reach their 20s. Johnson & Johnson (NYSE: [[ticker:JNJ]]) drug miglustat (Zavesca) is approved in Europe for treating NPC; the FDA rejected it in 2010 though it has the agency’s OK in Gaucher disease, another lysosomal storage disorder.

The Orphazyme drug is a small molecule designed to cross the blood-brain barrier and selectively amplify heat shock proteins. The company says in its IPO filing that these proteins, which are produced by the body as a response to cellular stress, protect against cellular toxicity caused by protein misfolding, aggregation, and lysosomal dysfunction. In a placebo-controlled Phase 2/3 study in the US and Europe, the 50 patients enrolled were evaluated according to a scale used to assess five different NPC measures. Though patients treated with the Orphazyme drug showed improvement, those results were not enough to be statistically significant. According to the filing, that benchmark was achieved only when the analysis excluded three patients in the arimoclomol group who have rare genetic mutations that are strongly predictive of an early onset and rapid progression of the disease. That analysis, conducted in agreement with the FDA, showed that the drug led to a 77 percent relative reduction in disease progression.

At the request of the FDA, the study added a second main goal of assessing change according to the Clinical Global Impression of Improvement scale, a widely used seven-point psychiatry assessment. Orphazyme says in the filing that because the agency’s request came after the study began, only eight patients had a formal baseline for this measure. Data for the rest of the patients had to be reconstructed after the study. The strong response in the placebo group made it difficult to show an overall effect of the drug according to the additional measure, the company says. But according to this assessment, Orphazyme says that of the patients whose disease severely progressed during the study, only 10.7 percent in the treatment group were “much worse” or “very much worse” compared to 26.7 percent in the placebo group.

Earlier this month, the FDA accepted Orphazyme’s drug application for arimoclomol, setting a March 17, 2021 target date for a decision. However, a possible safety risk associated with the heart could throw off that timeline. In preclinical testing, Orphazyme reported a potential heart signal in dogs, the company says in an updated filing. That signal was observed at a level 28 times higher than what was tested in clinical trials, and the company says it is not aware of any heart rhythm problems in humans who received the drug. According to the filing, the FDA asked the company to submit additional data by Oct. 1. If the information comes any later, the regulator says it might not have enough time to complete review of the drug by March 17. Orphazyme says in the filing that it does not expect it will be able meet the FDA’s deadline, which it acknowledges may affect the review timeline.

Orphazyme plans to file a marketing authorization application for arimoclomol in Europe later this year. Meanwhile, the company believes that the way its drug works in the brain could have applications treating other rare diseases. Late-stage clinical trials are underway or planned for Gaucher disease and the neuromuscular disorders amyotrophic lateral sclerosis (ALS) and sporadic inclusion body myositis (sIBM). According to the filing, Orphazyme plans to spend up to $15 million on the ALS clinical trial; up to $12 million for the sIBM study; and up to $3 million on clinical development in Gaucher disease. The company is setting aside $35 million to $40 million of the proceeds from its stock offerings for the regulatory process and planned launch of arimoclomol in NPC.

Image: iStock/Bjørnar Strømsholm