Evolus investors frown as FDA declines to approve Botox rival

(Reuters) – U.S. health regulators on Wednesday declined to approve Evolus Inc’s (EOLS.O) rival product to Allergan Plc’s (AGN.N) Botox, citing deficiencies related to the chemistry and manufacturing of its potential treatment for frown lines, sending its shares down as much as 35 percent.

The deficiencies cited by the U.S. Food and Drug Administration were “manageable”, according to Chief Executive Officer David Moatazedi, who joined the company earlier this month after serving as U.S. head of Allergan’s medical aesthetics business.

“They are all questions we have considered and contemplated prior to the response from the FDA,” Moatazedi said on a call with analysts, but refused to specify the exact questions asked by the FDA.

The company said it was committed to getting its DWP-450, which is being developed to treat glabellar lines or frown lines in adult patients, to the market by spring 2019.

Evolus expects to respond to the FDA with a complete submission within 90 days.

The deficiencies cited by the FDA were isolated to items related to chemistry, manufacturing, and controls processes, and none related to clinical or non-clinical matters, the company said.

The deficiencies were communicated in a so-called complete response letter related to Evolus’ marketing application for DWP-450, a Botox-like treatment.

Allergan’s Botox is the market leader for treatment of wrinkles and frown lines, but the threat of looming competition for the blockbuster treatment has put some pressure on the drugmaker.

Revance Therapeutics (RVNC.O) in February teamed up with Mylan NV (MYL.O) to develop a biosimilar to Botox.

A likely delay for Evolus’ treatment sent Allergan’s shares up 2.1 percent in morning trading.

The FDA’s decision on DWP-450 was widely anticipated by analysts, after the agency had issued a “form 483”, which outlined violations at the company’s facility following inspections in 2017.

Also on Wednesday, the company said that its partner Daewoong Pharmaceutical Co received a favorable inspection report of its manufacturing facility, which makes DWP-450.

Shares of Evolus, which went public about three months ago, were down 31 percent at $10.18 in morning trading.