Mallinckrodt and InfaCare Pharmaceutical Corporation have entered into an agreement under which Mallinckrodt will acquire InfaCare, a privately held specialty pharmaceutical company focused on development and commercialization of proprietary pharmaceuticals for neonatal and pediatric patient populations. InfaCare's developmental product stannsoporfin, a heme oxygenase inhibitor, is under investigation for its potential to reduce the production of bilirubin, the elevation of which can contribute to serious consequences in infants.
In July 2016 InfaCare and the U.S. Food and Drug Administration (FDA) reached agreement that a New Drug Application (NDA) could be filed for stannsoporfin using the totality of the drug's data package, including:
- A positive Phase 2(b) trial as its pivotal study
- Data from a second positive Phase 2(b) trial
- No additional studies required pre-approval
This allowance reflects the medical need in infants at risk of developing severe jaundice. There are also challenges in conducting controlled trials in this fragile population.
In December 2016 the FDA also granted stannsoporfin its Fast Track designation, a process designed to facilitate development and expedite the review of drugs to treat serious conditions and fill an unmet medical need1. Fast Track status allows for a "rolling" NDA data submission that has recently begun, and approval is anticipated in the first half of 2018. Post-approval commitments required by the FDA would include conducting trials in pre-term infants less than 35 weeks gestational age as part of the pediatric requirements. If approved, the drug will have substantial durability both as a new chemical entity and through its intellectual property which is valid until 2032.
Jaundice, or hyperbilirubinemia, is a common clinical condition seen in both term and pre-term newborns. Though lower levels of bilirubin can be benign, some newborns are at greater risk as a result of hemolysis (accelerated breakdown of red blood cells) contributing to the potential of reaching severe bilirubin levels. If a baby develops severe jaundice, there is a risk of bilirubin passing into the brain, a syndrome called acute bilirubin encephalopathy – which can be a serious condition. Prompt treatment may prevent significant lasting damage. But persistent, high levels of bilirubin in the brain can progress to kernicterus, a rare condition associated with severe and permanent brain damage. Symptoms include poor feeding, shrill cry, muscle rigidity, markedly arched back with a backwards hyperextension of the neck, seizures, and stupor or coma. Complications may also include hearing loss and death. American Academy of Pediatrics guidelines recommend all newborns be assessed for the risk of hyperbilirubinemia prior to discharge from the hospital.
Current therapies focus on removing excess bilirubin from the infant's system. Preliminary data from controlled clinical studies show that stannsoporfin's novel method of action demonstrated a robust effect in inhibiting bilirubin production. The drug has also been shown to have a good safety profile when compared to placebo, and has convenient administration through a single intramuscular injection. If approved, this proprietary therapy is expected to be the first and only pharmacologic treatment indicated for treatment of newborns at risk for developing severe infantile jaundice in the U.S.
In the U.S., the total number of term births is estimated at 3.7 million per year and, of those, approximately 750,000 infants are treated for jaundice. Of those treated, a significant number may be unresponsive to phototherapy – the current standard of care – even with extended and repeated courses of the treatment and face the risk of developing severe jaundice prior to discharge. In severe recurrent or refractory cases, physicians currently must resort to invasive treatment options, most often blood exchange transfusion and less frequently intravenous immunoglobululin infusions (IVIG), both of which have a more complex and lengthy administration than stannsoporfin's single injection. A small percentage of full-term infants may experience elevated bilirubin levels after discharge and be at risk of severe jaundice, requiring hospital readmission. It is anticipated stannsoporfin could reduce the incidence of readmission. The combined potential patient treatments required annually in the U.S. for severe jaundice is approximately 70,000 to 125,000.
Severe jaundice requires extended or recurrent treatment, with current U.S. treatment costs approximately $5,000 per patient12,13 for infants treated for the condition, which implies an annual cost to the U.S. healthcare system of roughly half a billion dollars.
InfaCare holds worldwide rights to stannsoporfin, and Mallinckrodt estimates the market for severe jaundice patient treatments for term babies in key international countries14 to be in the range of 150,000 to 275,000 annually. Mallinckrodt will assess regulatory pathways for approvals in markets outside the U.S. post-acquisition.
Stannsoporfin, if approved, is expected to be a highly effective therapy used for near- and full-term infants at risk of developing complications associated with severe jaundice. This new treatment option may reduce the number of newborns advancing to bilirubin levels requiring more intrusive, less specific therapies.
If approved, the drug may also decrease the risks associated with other treatments (e.g., bilirubin rebound) and the risk of prolonged and/or severe bilirubin elevation, which can impact central nervous system development.
If approved, Mallinckrodt expects stannsoporfin to be commercialized by the company's existing sales organization which currently supports INOMAX (nitric oxide) gas, for inhalation, therapy in neonatal centers across the U.S. At launch, patient access to this unique treatment option would also be supported and enhanced by the company's strong relationships with hospital networks, insurance companies and group purchasing organizations. Mallinckrodt's existing infrastructure of clinical and medical affairs experts will also support both approval and launch of the product. Mallinckrodt will be working with existing InfaCare talent on a smooth integration of the development process and regulatory filings.
Financial terms of the transaction include an upfront payment of $80 million, with additional payments of up to $345 million dependent on regulatory and sales milestones. Mallinckrodt expects the acquisition to be dilutive to adjusted diluted earnings per share by $0.15 to $0.20 for 2017 and modestly higher in 2018. Guidance on the impact of the acquisition to the company's GAAP diluted earnings per share has not been provided due to the inherent difficulty of forecasting the timing or amount of items that would be included in calculating such impact. Subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, the company estimates the transaction will close in the second half of 2017.