On September 24, 2020, Orphazyme received a letter from the US Food and Drug Administration (FDA) related to the New Drug Application (NDA) for arimoclomol in Niemann-Pick disease Type C (NPC). As a consequence, Orphazyme has filed an amendment of the F-1 registration statement (F-1/A) to the US Securities and Exchange Commission (SEC).
The documents for the global offering are available on the SEC website, and we have gone through them. Under ‘Recent Developments,’ we learn that the FDA has identified six potential review issues in the NDA application:
&#8211; FDA’s continuing evaluation of the integrity of data from the Phase 2/3 trial in NPC 
&#8211; The effect of the high degree of concomitant miglustat use in the Phase 2/3 trial in NPC on its ability to determine the safety and efficacy of arimoclomol, which could have potential implications for labeling/recommended dosing and post-marketing studies 
&#8211; the proposed primary hypothetical treatment effect used in the Phase 2/3 trial in NPC to estimate the treatment benefit effect 
&#8211; the meaningfulness of one metric utilized to evaluate patient progress in the Phase 2/3 trial of NPC 
&#8211; the timing of submission of the QTc and other study reports to the FDA, including in light of evidence suggesting a potential QT safety signal 
&#8211; differences among the formulations of arimoclomol used in our Phase 2/3 trial of NPC as compared to the formulation of arimoclomol to be marketed.
In conjunction the communication from FDA, Orhphazyme has update the timeline for the US listing process. The pricing of shares in the offering now intends to be public on September 28 (earlier communication proposed on September 24). The book for the global offering was fully covered as of September 24.
We have stated earlier that the dataset in this ultra-rare indication is complex. We argue that issues that arise during the NDA process should be seen as not uncommon. The communication letter does not impact the FDA’s acceptance of the Company’s NDA, the target PDUFA action date (March 17, 2021) or the FDA’s Priority Review determination. 
Regarding the issues outlined above, it is worth emphasizing that four of them have previously been discussed. We dont see the issues as dramatic or overwhelming. For instance: 
&#8211; the concomitant use of miglustat was stratified for in the study design in the phase 2/3 study. We believe it should rather be seen as a potential implication post-marketing (as also outlined in the F-1/A). 
&#8211; Regarding the evidence of a potential QTc signal, our communication has been and continues to be, that arimoclomol is a safe and well-tolerated drug. We have done a recap of the clinical publications with arimoclomol, and have not come across any potential QTc safety signal. Hence, we argue that the evidence of a potential QTc signal could well be in the preclinical data package.
To extend the QTc data package, a clinical trial with arimoclomol is being conducted. This clinical trial is delayed, related to Covid-19. We hope to learn about data from this trial in Q4’20.
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Concluding Remarks 
We have been in contact with the Orphazyme team. We are reassured about the NDA process with arimoclomol in NPC, just as we are reassured about our confidence in arimoclomol as a potential efficacious therapy in this underserved indication. We reiterate our probability rate of high 95% in NPC. Our Base Case at DKK 170 per share stands.
Regarding the US listing process, we hope to let it have its go and come back with a research note when we know the outcome. So far, the process seems to have put even further pressure on the stock, currently trading well below our Bear Case of DKK 95 per share. In the light of this, it is important for investors to adopt the broader picture; A potential US IPO, together with the current cash position and the potential sale of a Priority Review Voucher, could support the company’s operations until cash positive. This is not to mention the equity story that investor buys into the stock; a late-stage orphan pipeline with multiple shots on goal.