Outlook Therapeutics Stock Tumbles After FDA Rejects Key Eye Drug Again
The U.S. regulator has issued a second Complete Response Letter for the company's wet AMD treatment, ONS-5010, requesting additional efficacy data and clouding its U.S. market ambitions.
Shares of Outlook Therapeutics (NASDAQ: OTLK) plunged Tuesday after the company disclosed it had once again been rebuffed by the U.S. Food and Drug Administration. The stock fell more than 15% to $1.58 in trading after the biopharmaceutical firm announced a second Complete Response Letter (CRL) for its lead drug candidate, ONS-5010, intended to treat wet age-related macular degeneration (wet AMD).
The FDA's decision prevents the company from marketing ONS-5010 in the United States and stated a need for additional data to further support the application. This latest setback follows an initial rejection in August 2023, which cited manufacturing and control issues alongside a request for more substantial evidence.
In response to the first CRL, Outlook Therapeutics conducted its NORSE EIGHT study and resubmitted its Biologics License Application (BLA) in early 2024, believing it had addressed the agency's concerns. However, the second CRL indicates the FDA remains unconvinced, creating significant uncertainty for the company's domestic strategy. Outlook Therapeutics said it plans to request a meeting with the FDA to understand the requirements for a potential approval.
The regulatory failure in the U.S. is a critical blow to Outlook's central commercial strategy. ONS-5010, which carries the brand name Lytenava, is a specially formulated version of the antibody bevacizumab for direct injection into the eye. While bevacizumab is already widely used by ophthalmologists for wet AMD, it is an 'off-label' use of a cancer drug. Outlook's goal was to secure the first official FDA approval for an ophthalmic formulation of bevacizumab, a move that could capture a significant portion of the lucrative retinal disease market currently dominated by expensive treatments like Eylea and Lucentis.
The market reaction reflects the gravity of the delay. The stock's sharp decline pushed its market capitalization down to approximately $127 million. Shares have traded in a volatile range over the past year, between a high of $3.39 and a low of $0.79, and this news sends the stock back toward the lower end of that spectrum.
Adding a layer of complexity to the company's story, the FDA's stance contrasts sharply with that of European regulators. ONS-5010 received marketing authorization in both the European Union and the United Kingdom, and has already been launched in the UK and Germany. This success abroad suggests the clinical data was sufficient for other major regulatory bodies, but highlights the distinct and rigorous demands of the FDA.
For investors, the path forward is unclear. The need to generate 'additional efficacy data' often implies a requirement for a new, lengthy, and expensive clinical trial, a difficult undertaking for a late-stage biopharmaceutical company with limited revenue. While Wall Street analysts held a consensus target price of $6.75 prior to the announcement, that figure is now under severe threat as the timeline for any potential U.S. revenue is pushed out indefinitely, pending the company's discussions with the FDA.