Is the FDA’s CRL on scPharma Justified?

After scPharmaceuticals Inc. (NASDAQ: SCPH) announced that it had received a Complete Response Letter from the U.S. Food and Drug Administration (FDA), its shares were absolutely crushed on Monday.

Normally a CRL from the FDA can mean disaster for a company. The FDA issues such as letter to indicate that the review cycle for an application is complete and that the application is not ready for approval in its present form.

In this CRL, the FDA cited the need to conduct preapproval inspections at two of the company’s third-party manufacturing facilities that could not be conducted due to travel restrictions. Also, the FDA had questions in regards to testing, labeling and features of the combination product unrelated to the drug constituent.

Often times, PDUFA dates can be rescheduled or pushed back, but citing travel restrictions and sending out a CRL seems a bit lazy. However, the FDA does have its hands full with COVID-19 vaccine meetings.

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All this is in regards to the firm’s New Drug Application (NDA) for Furoscix for subcutaneous injection. Furoscix is a proprietary furosemide solution formulated to a neutral pH to allow for subcutaneous infusion via a wearable, pre-programmed on-body drug delivery system, for outpatient self-administration. It is currently under development for the treatment of congestion due to fluid overload in adult patients with worsening heart failure.

Management noted that while it was disappointed that these on-site inspections, and other issues raised in the CRL, will not be resolved by the previously granted December 30, 2020, PDUFA date, it is committed to working with the manufacturing partners and responding to the agency’s concerns as expeditiously as possible. At the same time, management believes that Furoscix can play a significant role in preventing heart failure hospital admissions and readmissions due to fluid overload by intervening with this novel therapy at home.

At its current projected cash burn rate, the company is expected to fund operations through 2023. As it stands now, the company has cash, cash equivalents, restricted cash and investments of $114.5 million.

Looking ahead, the company will request a Type A meeting with the FDA to discuss the issues described in the CRL and the steps required for the resubmission of the NDA for Furoscix.

scPharmaceuticals stock traded down 36% early Monday, at $5.59 in a 52-week range of $4.01 to $11.99. The consensus price target is $13.75.

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