OvaScience shares blitzed after FDA steps in to supervise lead product

When OvaScience ($OVAS) went public last year, the management laid out the tantalizing prospect that their lead fertility program could deliver a marketable product by the end of this year. And they could do it, according to their S-1, without the risk associated with FDA oversight for a new drug by developing it as a cellular and tissue-based product.

The FDA, though, apparently has other ideas about that.

Last night the fledgling biotech reported that they would have to stop enrollment in AUGMENT in the U.S. after receiving a letter from the agency telling OvaScience to file an IND, the traditional--much longer--route for drug developers. The FDA, says OvaScience, questioned "the status of AUGMENT as a 361 HCT/P" and is "advising the company to file an Investigational New Drug (IND) application."

OvaScience shares went into free fall on the news, shedding about 40% of their value. The company says it will start its trial outside the U.S. next year as it tries to sort things out with the FDA. The company's product is designed to improve the quality of a woman's eggs in order to increase the odds of success for in vitro fertilization.

According to the company's S-1 filed in 2012: "If the FDA disagrees with our interpretation of the applicable regulations, disagrees with our characterization of the AUGMENT procedure or changes its position with respect to such rules and regulations, we may not be able to commercialize AUGMENT on the timeline or with the resources we expect, if at all."

In a conference call this morning Dipp told analysts that the company received an outside legal opinion on its development path and still believes it meets all the requirements needed to skirt FDA supervision.

OvaScience CEO Michelle Dipp was a veteran of Sirtris--where she worked closely with CEO Christoph Westphal--when she started the company. After working at Sirtris, Dipp joined Westphal and Rich Aldrich to run the Longwood Fund, which helped launch OvaScience. GlaxoSmithKline ($GSK) bought Sirtris for $720 million in 2008, and recently shut down its operations in Cambridge and transferred the R&D work to the Philadelphia area after making little headway with its therapeutic approach. 

- here's the press release

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