FDA blesses nonprofit-backed Chagas drug, thwarting ex-Shkreli biotech’s bid for rival launch

Marking a dramatic step for a partnership aiming to affordably treat Chagas patients, the FDA approved the group's antiparasitic treatment benznidazole. But the approval is an equally dramatic setback for Humanigen, a company once run by infamous pharma executive Martin Shkreli—and that drugmaker may have Shkreli himself to thank for its loss.

With the FDA's accelerated approval, collaborators Chemo Group, Mundo Sano and the Drugs for Neglected Diseases Initiative (DNDi) picked up seven years of orphan drug exclusivity for benznidazole and a Tropical Disease Priority Review Voucher that could be worth hundreds of millions.

They also beat Humanigen, formerly known as KaloBios, which has been developing its own version of benznidazole. Under Shkreli's leadership, KaloBios had snapped up a benznidazole program on the cheap, planning to take the drug to market at a price comparable to expensive hepatitis C treatments from Gilead Sciences and net a valuable priority review voucher, too, or so Shkreli said at the time.

Now, Humanigen's shares are down 65% and the company says it "no longer expects to be eligible to receive a PRV" with its own benznidazole program, meaning it'll miss out on a voucher sale potentially worth hundreds of millions of dollars. The vouchers expedite FDA review of new meds, and pharma companies have paid a pretty penny for that luxury in recent years.

Humanigen may have Shkreli to thank for that loss. DNDi, which has worked to bring Chagas treatment to patients worldwide for years, took note when KaloBios said it planned to bring benznidazole, approved in various countries around the world, to the U.S. market.

"[W]hen we dug a little deeper into the intentions of the company ... we couldn’t believe our eyes," Rachel M. Cohen of DNDi North America wrote in a May 2016 newsletter, noting a months-earlier KaloBios presentation that pegged the drug's future price to hep C treatments such as Sovaldi, which carried a $1,000-per-pill price when it launched.

By the time KaloBios' new management had backed away from that strategy—the new leadership said it would charge at-cost plus a "reasonable and transparent profit margin" for any of its drugs, including benznidazole, Cohen noted—DNDi and its partners were putting together an FDA approval push of their own.

Chemo Group, Mundo Sano and DNDi kicked off their Chagas collaboration back in 2013, a spokesperson for nonprofit R&D group DNDi said on Wednesday. Chemo Group is a Spanish multinational pharma that sells generics and branded drugs, and it runs an Argentina-based nonprofit foundation, Mundo Sano. According to the company’s website, Chemo Group works to drive pharma prices down and develop treatments for neglected diseases.

Last year, the trio extended their work to seek U.S. approval for benznidazole. When they extended the deal, DNDi executive director Dr. Bernard Pécoul said it was "scandalous and unjustifiable" that so few people living with Chagas disease could obtain treatment. The team said only 1% of people living with the disease could access treatment.

Under a provision in the partnership, 50% of revenue from a PRV sale will fund a "far-reaching" access program to ensure supply in the U.S. and other countries, according to a DNDi spokesperson. Pécoul said those proceeds will be a "shot in the arm to help end the neglect of Chagas disease."

Humanigen, on the other hand, has taken a big hit from the new approval. In Wednesday's filing, the company said it will have to re-evaluate its benznidazole development plans, as well as its monoclonal antibodies, lenzilumab and ifabotuzumab.

During his stint at KaloBios, Shkreli was hit with fraud charges tied to his time at another drugmaker, Retrophin; he was fired at KaloBios in December 2015 and was found guilty on some of those fraud charges earlier this month. Humanigen adopted its new name in July, about a year after emerging from Chapter 11 bankruptcy.

Approved for children aged 2 to 12, benznidazole is the first Chagas drug to win U.S. approval. According to DNDi, benznidazole is approved in eight Latin American countries, while another 13 haven't approved the med.

Chagas is spread by a parasite found in feces from the triatomine bug. About 300,000 people living in the U.S. have the disease, according to the FDA. The FDA says the med is associated with common adverse reactions such as stomach pain, rash, decreased weight, headache and nausea, as well as other more serious conditions such as nervous system effects and bone marrow depression.