Alimera, pSivida skyrocket as they give the thrice-rejected Iluvien another go

Partners Alimera ($ALIM) and pSivida ($PSDV) have three times gone to the FDA with the eye drug Iluvien and three times walked away with little to show for it. But the fourth go-round will be different, the partners believe, and investors would seem to agree, sending the companies' shares skyward on renewed hopes for a 2014 approval.

In its most recent rejection of Iluvien, a back-of-the-eye treatment for diabetic macular edema, the FDA demanded another clinical trial to address some safety concerns and told Alimera and pSivida they had to slog through another advisory panel before getting started, effectively nixing any chance of an approval in the near term, if ever.

But the agency has changed its tune over past two months, Alimera said, no longer asking for new data and waiving the committee meeting. Now the parties are in the midst of a labeling discussion for Iluvien, and Alimera plans to submit its response to the FDA's October rejection in the first quarter of next year, setting the table for an approval thereafter.

The news sent Alimera's shares up about 75% on Thursday, and pSivida, which is due 20% of net profits from Iluvien's sales, jumped more than 40%. The drug's most recent regulatory roadblock had roughly halved each company's market value.

If everything works out this time, Iluvien is likely to clear about $250 million a year in the U.S., Ladenburg Thalmann analyst Juan Sanchez wrote in an investor note, according to Reuters.

The 9-lived drug seemed to have finally hit bottom with its third rejection, as the FDA said unequivocally that Iluvien was unapprovable without another costly clinical trial, and Alimera CEO Dan Myers sounded less than optimistic in pondering "whether there is a path forward in the U.S. for Iluvien." But Iluvien's safety data from Europe, where it is already on the market, were apparently enough to assuage many of those concerns, and now it's up to Alimera and pSivida to stick the landing on their fourth try.

- read Alimera's statement
- here's the Reuters story