PSivida, Alimera Shares Tank As FDA Rejects Iluvien NDA - Update

(RTTNews) - Shares of pSivida Corp. (PSDV) sank 21 percent Friday after the company said its licensee Alimera Sciences Inc. (ALIM) received a complete response letter from the US Food and Drug Administration for Iluvien new drug application.

Iluvien is a sustained release intravitreal implant used to treat vision impairment associated with chronic diabetic macular edema, or DME.

Meanwhile, Alimera shares plummeted over 26 percent on the Nasdaq.

In a statement, the FDA said the rejection of Iluvien arises from concerns regarding the benefit to risk/safety profiles of the drug. The FDA had previously rejected Iluvien on two occasions.

To address the deficiencies, the FDA said results from a new clinical trial would need to be submitted along with at least 12 months of follow-up for all enrolled patients. The FDA also referenced deficiencies at the facility where Iluvien is manufactured.

To sort out the deficiencies, the FDA notified Alimera of an Advisory Committee meeting to be convened on January 27, 2014.

Iluvien is approved and commercially available in the United Kingdom and Germany and is slated for launch in France early next year. The drug is also available in Austria, Portugal and Spain and is pending approval in Italy. Alimera does not believe that the FDA-cited deficiencies will affect its European commercial supply.

DME is a result of damaged blood vessels that can cause fluid to leak into the eye. Alimera estimates about 1 million people in the US suffer from DME, with 30 thousand new cases each year.

Typically, fortunes of biotech stocks are linked to events such as clinical trial results and FDA decisions. Investors make a killing when trading in such stocks are timed prudently.

pSivida stock is trading at $2.98, down $0.82 or 21.58%, on a volume of 3.5 million shares on the Nasdaq. In the past 52 weeks, the share traded in the range of $1.17 - $5.60.

Alimera stock is trading at $1.9901, down $0.72 or 26.56%, on a volume of 617 thousand shares on the Nasdaq. In the past 52 weeks, the share traded in the range of $1.26 - $5.69.