Bedford, MA eye care biotech Ocular Therapeutix saw its share price plummet on Wednesday after the FDA rejected its lead drug for the second time. To make matters worse, the company and its top executives are now facing fraud allegations in federal court.
Ocular (Nasdaq: OCUL) said after markets closed on Tuesday that the FDA had denied its application for Dextenza, a tiny insert that is placed in the eye and delivers a corticosteroid to treat pain following surgical procedures. Regulators cited manufacturing issues that caused some batches of Dextenza to become contaminated. Manufacturing problems also doomed the company’s initial request for approval in July 2016.
((Ocular CEO Amar Sawhney looks on as a research scientist works in the company's lab.))
During a first quarter earnings call that day, the company’s quality and compliance chief, Eric Ankerud, confirmed that the FDA had asked the company to address a “particulate matter issue.” However, Ankerud expressed confidence that the problem would be resolved, saying, “We feel quite comfortable that we have the situation under control.” During the same call, Ocular CEO Amar Sawhney told investors and analysts, “We think these are resolvable issues, and we have responses.”
The lawsuits argue that those statements fraudulently downplayed and concealed the true extent of the problem. The complaints point to the actual document that the FDA sent to Ocular in May outlining its concerns. In the form, which was posted by Seeking Alpha in its article last week, the agency wrote that 10 of 23 lots of Dextenza that it examined contained particulates. The remaining lots “were scrapped prior to the visual inspection,” the FDA said, so it isn't known whether they were contaminated.
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