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Sonus gets break from EC regulators with European approval of EchoGenL


News provides psychological boost to contrast firmUltrasound contrast developer Sonus Pharmaceuticals took a giant step forward in its quest to market a proprietary ultrasound contrast agent. On July 20, the company announced that the European

News provides psychological boost to contrast firm

Ultrasound contrast developer Sonus Pharmaceuticals took a giant step forward in its quest to market a proprietary ultrasound contrast agent. On July 20, the company announced that the European Commission had issued marketing authorization for its ultrasound contrast agent, EchoGen. The decision clears the way to market the product in the 15 countries of the European Union.

Like Optison, an ultrasound agent from Molecular Biosystems and Mallinckrodt that is already on the market in Europe, EchoGen is approved for use in echocardiography. Unlike Optison, however, EchoGen's package labeling will state that it is indicated to enhance the visualization of blood flow in renal, hepatic, and peripheral vasculature. The mention of these conditions opens the door for sales staff from Abbott International, the marketing partner of Sonus, to promote EchoGen for radiological applications.

In addition to marking the first commercialization of EchoGen, the European approval serves as a massive psychological boost for Bothell, WA-based Sonus. The company's morale-and stock price-were hammered last February, when the Food and Drug Administration (FDA) issued a not-approvable action letter for EchoGen (SCAN 3/4/98). While the European review probably won't affect the company's negotiations with the FDA over EchoGen's application, it's still a positive sign, according to Alex Zisson of investment bank Hambrecht & Quist in New York City.

"European approval isn't a guarantee of FDA approval, but a unanimous panel vote (earlier this year recommending approval in Europe) and a very mild side-effect profile in the label certainly should make people more confident that U.S. approval will come early next year," Zisson said. "European approval elevates them into the rarefied group of biotech companies that have actually done all the work and gotten a product approved."

Sonus is not, however, acting like a member of the elite. The company's tough times, which began with the FDA action letter, have transformed the firm from a spunky upstart, making aggressive claims about its product, to one whose executives now couch their expectations in cautious optimism. Sonus CFO Gregory Sessler described the European approval as good news, but stopped far short of saying that Sonus had turned the regulatory corner worldwide.

"This is our first product to reach a regulatory marketing approval in a major market, and it is a validation of the safety and efficacy of the product," Sessler said. "But the actions of the agencies (regulatory bodies in the U.S. and Europe) are independent. Certainly the action letter we received from the FDA in February was unanticipated, and certainly there is some work that we are doing to address that letter."

Much has humbled the fledgling company in the months since the not-approvable letter was delivered by the FDA. A follow-up visit with FDA reviewers in April to iron out details regarding the resubmission of clinical data failed to bring forward the expected quick resolution of problems. Whereas Sonus announced prior to the meeting its expectation to have a revised submission ready for FDA review no later than early summer, the company publicly repudiated that expectation shortly after meeting with FDA officials. The amendment to EchoGen's new drug application submission is still being prepared. It might be sent to the FDA before the end of summer.

Because the FDA has six months to review the application, it is unlikely that EchoGen will enter the U.S. market before 1999. That would put the company a full year behind arch-rivals MBI and Mallinckrodt, which began selling Optison in the U.S. in January and in Europe in May.

EchoGen and Optison were preceded in the European market by two other ultrasound contrast agents, Levovist and Echovist. Although the agents, which are marketed by Schering of Berlin, have been available in Europe for several years, neither has gained a wide following. Performance issues, particularly a short lifespan in the body, is believed to be a major reason. Neither EchoGen nor Optison have such performance problems.

The European decision to allow marketing of EchoGen follows a March 1998 recommendation by the Committee for Proprietary Medicinal Products, the scientific review committee of the European Medicines Evaluation Agency. Although the agent has been approved by the EC, pricing and reimbursement issues must still be worked out with the 15 individual countries in the EC, namely the U.K., Ireland, France, Germany, Italy, Spain, Portugal, Sweden, Finland, Denmark, Belgium, Luxembourg, the Netherlands, Greece, and Austria.

The pricing and reimbursement obstacle is also holding back Optison from more widespread distribution. Mallinckrodt, however, was able to begin sales within 24 hours of EC approval in three countries-Germany, Austria, and the U.K.-while the company began negotiating pricing and reimbursement with the remaining EC members.

Abbott International and Sonus have chosen to forego such a strategy of immediate penetration in selected countries, focusing instead on a launch date sometime in the first quarter of 1999. Zisson believes the strategy is to make one big bang instead of a lot of little ones.

"Abbott's perspective is to generate the maximum amount of noise and not stagger around, country by country, with a limited effort," he said. "Mallinckrodt, on the other hand, wants to sneak in as quickly as possible in each country. We may never know which is the better strategy."

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