As the FDA decision date for Duchenne muscular dystrophy (DMD) treatment drug Delamiocell approaches, Capricore Therapeutics has filed a lawsuit against its U.S. commercial partner NS Pharma and its parent company Nippon Shinyaku.
In a breach of contract lawsuit filed in New Jersey Superior Court, Capricor alleges that NS Pharma failed to “adequately prepare” for the commercial launch of Delamiocell. The San Diego rare disease expert added in the complaint that NS Pharma “dropped the pencil” and halted preparations for launch after the FDA first rejected Delamiocell in a complete response letter (CRL) last July.
Capricor is seeking an injunction to restore U.S. commercial rights to the treatment.
“I have spent nearly 20 years developing Capricor with one goal: to make Deramiocel available to treat these boys,” Capricor CEO Dr. Linda Marbán said in the release. “I know what happens inside their muscles when treatment is not possible, so I know what every additional month of delay costs them. I will not be willing to watch NS Pharma’s inaction take that away from them in any version of this case.”
Capricor shares have fallen 13% and Nippon Shinyaku shares have fallen 15% since announcing the lawsuit after the market closed on Thursday.
In a release, Capricor also explained that “pricing deficiencies” in its commercialization agreement with NS Pharma “preclude patients covered by Medicare, Medicaid, or private insurance from accessing the therapy.” The company added that NS Pharma “refused to compromise” to resolve the pricing issue.
“We are confident that Nippon Shinyaku and Nissin Pharma have acted appropriately and in good faith to ensure that treatment is available to DMD patients following approval,” the companies said in a written response to the lawsuit. “While we recognize that Capricor’s claims are baseless, we remain open to discussions with Capricor to maximize the value of CAP-1002 (Delamiocell).”
Capricor said in its lawsuit that neither it nor NS Pharma understood when they entered into the partnership that the agreed-upon pricing structure was “not viable.”
“This flawed pricing structure would also make it economically impractical to distribute delamiocel to patients covered by Medicaid or private insurance,” Capricole wrote. “Simply put, neither Capricor nor its distributors can afford to sell the drug for much less than it costs to manufacture and sell it.”
Capricor’s attempts to get regulatory approval for Delamiocel have also been mired in controversy. When the FDA rejected the allogeneic heart-derived cell therapy, the company said it had previously agreed with the agency that a Phase 2 trial would be sufficient to support approval.
However, nine months later, Capricor reported that the FDA had “released” the CRL and was reexamining its application with an August 22 PDUFA date.
The FDA’s change in direction fit the pattern that defined the Center for Biologics Evaluation and Research under former director Vinay Prasad, M.D., who oversaw multiple rejections of rare disease drugs that were surprising for a biotech sponsor, including a public dispute with gene therapy developer UniQure that may have contributed to Prasad’s resignation.
