Despite a late-stage flop, Kamada preps its orphan drug for EMA review

Kamada CEO David Tsur

Israeli biotech Kamada ($KMDA) confirmed that its lead candidate failed to meet both its primary and secondary endpoints in a late-stage trial--but that won't interrupt the company's plans to file for European approval. Investors didn't seem to share management's optimism, however, sending Kamada's shares down about 20% on Thursday morning.

Kamada's drug is designed to treat a protein deficiency linked to an increased risk of lung and liver disease, replacing patients' missing alpha-1 antitrypsin (AAT) through an inhaled treatment. Back in May, the biotech revealed that its drug failed to beat out placebo in its primary goal of delaying flare-ups in lung conditions in a Phase II/III trial on 168 patients. Now, confirming those results, Kamada adds that AAT didn't come through on its secondary endpoints, either.

However, the drug "showed concordance of a potential treatment effect" on lung function, the company said, especially in a subgroup of patients most prone to exacerbations. A few of those measurements even hit statistical significance, according to Kamada, and the company's inhaled AAT proved safe and tolerable in the study.

So, despite the missed efficacy endpoints, Kamada is planning to press ahead with regulatory filings, pointing out that existing intravenous treatments for AAT won approvals on the strength of safety data alone. And, CEO David Tsur contends, those positive signals among the most severe patients demonstrate the promise of Kamada's drug in an underserved population.

"Based on orphan designation of the drug, prior discussions held with the regulator, the strength of these data and the persistent unmet need in this orphan indication, we will advance our discussions with the European Medicines Agency with the intent to submit for conditional approval in order to bring our inhaled AAT to patients with AATD in Europe, and will initiate discussion with the FDA to determine a U.S. path for registration," Tsur said in a statement.

That wasn't enough to satisfy Wall Street, however, and AAT's latest misstep sent Kamada's shares down to around $5.75, nearly 40% below its 2013 IPO price of $9.25 and well off its March peak of $17.50.

Meanwhile, Kamada is in the midst of a Phase II trial on AAT, results from which the company plans to combine with the Phase II/III to support its FDA application. Italy's Chiesi Farmaceutici has signed up to commercialize the drug in Europe if it wins approval, a deal that could mean up to $60 million for Kamada.

Alpha-1 antitrypsin deficiency affects between one in every 1,600 people and one in every 5,000 people, according to the National Institutes of Health.

- read the statement