First the FDA, now the EU. An advisory body has indicated the EU's health regulator should not approve Orphazyme's arimoclomol for a rare lysosomal disorder.
The Danish biotech said it's "unlikely" the agency's position will change before a formal vote in March. It's another crush to Orphazyme's pipeline, which suffered a rejection for the same drug from the FDA last June. In both instances, the Danish meme stock had hoped for approval of arimoclomol in Niemann-Pick disease type C, which impacts the body's ability to transport cholesterol and lipids inside of cells.
Orphazyme's shares sank by one-third to $1.36 apiece as of 10:06 a.m. ET Thursday. The company's shares went through a wild ride in 2021 as part of the GameStop-fueled meme stock fiasco, reaching highs of $77 a pop at one point.
Orphazyme disclosed the negative trend vote by the EU's Committee for Medicinal Products for Human Use after market close Wednesday. The company is still discussing the drug with the FDA to see whether it has a path to market in any form.
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Now, the company will "assess" its strategic options and provide an update to investors at a later date. The news comes as CEO Christophe Bourdon is set to depart to become CEO of Leo Pharma in the coming weeks.
The original owner of arimoclomol, CytRx, issued a statement saying it was "disappointed" by the EU body's regulatory stance. The Los Angeles biotech sold the rights to arimoclomol to Orphazyme in exchange for $150,000 upfront in 2011, with a potential $120 million in milestones down the line. The company said the therapy is not a member of its "valuable core assets," according to a statement.
This is just the latest blunder for arimoclomol. The drug failed two phase 2/3 studies in 2021, including one in inclusion body myositis and one in amyotrophic lateral sclerosis.