Shares of Gemphire Therapeutics (NASDAQ:GEMP) are having a rough run in the morning session following its announcement that it has delayed its licensing arrangement with Pfizer Inc (NYSE:PFE) for gemcabene, its drug candidate that treats abnormal levels of blood lipids and nonalcoholic steatohepatitis.
The new agreement permits Pfizer to pull out of the license agreement if the first commercial sale of gemcabene hasn’t occurred by April of 2024, which is three years later than the date previously agreed to.
“The extension to the agreed date by which we need to commercialize gemcabene provides us with additional flexibility to focus on the optimal development path and timeline for gemcabene,” Steven Gullans, CEO of Gemphire, said in a statement.
Separately, Gemphire delivered another dose of bad news, with its announcement that the US Food and Drug Administration has asked for data from a toxicology study to support lifting the partial clinical hold on gemcabene for trials of more than six months.
Due to its concerns about toxicity to the liver, the FDA has informed Gemphire that Phase 3 studies evaluating gemcabene for the treatment of dyslipidemia or abnormally high levels of lipids will not take place until the partial clinical hold on trials longer than six months is lifted.
“We are working closely with the FDA to release the partial clinical hold on gemcabene, with the goal of proceeding to an end of Phase 2 meeting and reaching an agreement on the design of a Phase 3 clinical program,” said CEO Gullans.
In response to the delay in the commercialization of gemcabene and its difficulties with the FDA, investors sent Gemphire shares down 39% to US$4.48 in Tuesday’s early session.
As part of the new deal, the royalty rates that will be paid to Gemphire have been raised slightly, ranging from the high single digits to the mid-teens, depending on sales levels.