Seems there'll be no surprise happy ending in the Delcath ($DCTH) story. The FDA handed down its long-expected rejection of the company's drug-device cancer treatment, and the New York outfit has summarily canned its chief executive.
In a complete response letter issued Thursday, the FDA said it had too many unanswered questions to approve the Melblez Kit, demanding another randomized clinical trial for the device designed to deliver hefty doses of chemotherapy and treat eye cancer that has spread to the liver.
It's quite likely Delcath saw all this coming, as the company's board fired CEO Eamonn Hobbs on Monday, announcing today that two of its executive vice presidents will serve as co-CEOs for the foreseeable future.
The FDA rejection and executive ouster are unlikely to surprise anyone paying attention to Delcath's fall from grace. In the spring, an FDA panel took serious issue with Delcath's pivotal data, pointing out that about 7% of Melblez patients died of adverse events like liver failure and gastrointestinal bleeding and recommending the agency reject the drug-device combo.
That news sent Delcath's stock into a 40% tailspin, as investors rightly figured a full-on FDA rejection was on the horizon. The latest Melblez roadblock tanked Delcath's shares more than 12% in pre-market trading, but the damage has long since been done: April's FDA panel vote belted Delcath into penny stock territory, and the company's shares have cratered more than 75% since the start of the year.
Delcath hacked away about 20% of its workforce in June, an effort to stem its cash burn and focus on commercializing Melblez in Europe, where it has CE mark approval.
- read Delcath's FDA disclosure
- here's the statement on Hobbs' firing
- check out FierceBiotech's take