AstraZeneca’s $2.7B ZS-9 rejected again by FDA

Second time unlucky for the U.K.-based Big Pharma's $2.7 billion drug candidate.

The FDA has rejected AstraZeneca’s hyperkalemia drug ZS-9 for the second time in 12 months. The news marks a further blow for a program AstraZeneca saw giving it a sizable share of a $6 billion (€5.5 billion) market when it acquired the asset in its $2.7 billion buyout of ZS Pharma. 

Next to nothing has gone right for AstraZeneca and ZS-9 since then. The problems began in May when the FDA rejected the drug—which was already being reviewed at the time AstraZeneca bought ZS Pharma—on the basis of observations made by its inspectors during a preapproval assessment of the ZS-9 manufacturing facility. Ten months later, AstraZeneca is still being dogged by regulatory concerns about the production of ZS-9.

AstraZeneca revealed scant details in a release to disclose its latest FDA complete response letter (CRL). But in noting the rejection followed an FDA inspection of the ZS-9 production plant, AstraZeneca has again pointed to manufacturing problems as the source of its woes.

In between the two CRLs, AstraZeneca picked up regulatory approval for ZS-9 in the European Union. But it needs to access the U.S. market if it is to begin racking up the sort of sales required to justify the price it paid for ZS Pharma in 2015. At that time, the takeover looked like a direct route to blockbuster sales for AstraZeneca, and a blow to Relypsa’s attempts to corner the hyperkalemia market with its ZS-9 competitor Veltassa.

Today, 16 months after the ZS Pharma buyout, Relypsa has sold out to Vifor Pharma for $1.5 billion and AstraZeneca is still yet to get its drug on the market in the U.S.

Vifor, the specialty pharma unit of Galenica, is using Veltassa and the commercial footprint it acquired to spearhead its attempts to become a strong enough business to thrive after its parent company spins off its pharmacy business. And it is committing serious cash to the cause, with the 2017 budget for the launch and ramp up of Veltassa coming in at upward of $260 million. AstraZeneca’s missteps are helping Vifor’s efforts.

At the time of the last CRL, AstraZeneca thought recently-submitted manufacturing data not yet reviewed by the FDA could help its case but the problems at the plant persist. AstraZeneca said it is working with the FDA to fix the outstanding issues “as soon as possible.”