With an FDA decision date looming for its Duchenne muscular dystrophy (DMD) treatment deramiocel, Capricor Therapeutics has filed a lawsuit against its commercial partner in the United States, NS Pharma, and its parent company, Nippon Shinyaku.
In its breach-of-contract filing in the Superior Court of New Jersey, Capricor alleges that NS Pharma has failed to “adequately prepare” for the commercial launch of deramiocel. The San Diego rare disease specialist added in its complaint that NS Pharma went “pencils down,” halting its launch preparations after the FDA initially rejected deramiocel with a complete response letter (CRL) in July last year.
Capricor is seeking an injunction that would restore its U.S. commercial rights to the treatment.
“I have spent nearly two decades building Capricor with one goal in mind: making Deramiocel available to treat these boys,” Capricor CEO Linda Marbán, Ph.D., said in a release. “I know what every additional month of delay costs them, because I know what is happening inside their muscles when they cannot be treated. There is no version of this case in which I am willing to watch NS Pharma’s inaction take that away from them.”
Since announcing the lawsuit after the market closed Thursday, Capricor’s shares have dropped 13%, while Nippon Shinyaku’s shares have tumbled 15%.
In its release, Capricor also explained that a “pricing flaw” in its commercialization agreement with NS Pharma “will prevent patients covered by Medicare, Medicaid or private insurance from accessing the therapy.” The company added that NS Pharma has “refused to compromise” to resolve the pricing issue.
“We are confident that both Nippon Shinyaku and NS Pharma have responded appropriately and sincerely to ensure treatment reaches DMD patients after approval,” the companies wrote in response to the lawsuit. “While we recognize that Capricor’s claims lack merit, we remain open to discussions with Capricor to maximize the value of CAP-1002 (deramiocel).”
Capricor explained in the lawsuit that neither it nor NS Pharma understood when they formed their partnership that their agreed-upon pricing structure “was not viable.”
“This flawed pricing structure will also make it economically impractical to distribute deramiocel to patients covered by Medicaid or private insurance,” Capricor wrote. “Simply put, neither Capricor nor the Distributor can afford to sell the medicine at a price much lower than the costs of making and distributing it.”
Controversy has also surrounded Capricor’s attempts to get deramiocel cleared by regulators. When the FDA rejected the allogeneic cardiac-derived cell therapy, it was a surprise to the company, which said it had previously agreed with the agency that its phase 2 trial would be sufficient to support approval.
Nine months later, however, Capricor reported that the FDA had “lifted” the CRL and was re-reviewing its application, with an August 22 PDUFA date.
The FDA’s about-face fit a pattern that came to define the Center for Biologics Evaluation and Research under its former chief Vinay Prasad, M.D., who oversaw multiple rejections for rare disease therapies that came as surprises to their biotech sponsors, including a public dustup with gene therapy developer uniQure that may have contributed to Prasad’s departure.