Abady v. Lipocine Inc.

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SOLOMON ABADY, et al., Plaintiffs, v. LIPOCINE INC., et al., Defendants.

No. 2:19-cv-00906

United States District Court, D. Utah

April 13, 2023

MEMORANDUM DECISION AND ORDER GRANTING MOTION TO DISMISS

The Honorable Clark Waddoups United States District Court Judge

Before the court is Defendants' motion to dismiss Plaintiffs' amended complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for failure to state a claim for relief in compliance with the pleading requirements set forth in Rules 8 and 9(b) of the Federal Rules of Civil Procedure and the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(b) (“PSLRA”). (ECF No. 47.) The court heard oral argument on Defendants' motion on January 12, 2022. After considering the parties' briefing and arguments, the court now grants Defendants' motion for the reasons set forth herein.

Background

Founded in 1997, Lipocine is a biopharmaceutical company headquartered in Salt Lake City, Utah that focuses on the development of pharmaceutical treatment options relating to men's and women's health. (Am. Compl. at ¶¶, 2 & 30, ECF. No. 44.) Lipocine primarily focuses on the development of oral delivery solutions for poorly bioavailable drugs. (Id. at ¶ 30.)

Lipocine's lead product candidate is TLANDO (LPCN 1021), an oral testosterone replacement therapy. (Id. at ¶ 31.) TLANDO is an oral capsule containing testosterone undecanoate (TU) in a lipid formulation. (Id. at ¶ 33.) TLANDO is designed to enable absorption of TU by the intestines, where it can then be converted into testosterone by the body. (Id.) TLANDO is intended to function as an oral testosterone replacement therapy (“TRT”) for adult males whose bodies do not produce sufficient levels of testosterone, a condition known as hypogonadism. (Id.)

On August 31, 2015, Lipocine submitted its initial New Drug Application (“NDA”) for TLANDO to the United States Food and Drug Administration (“FDA”) seeking approval of the drug for marketing in the United States. (Id. at ¶ 36.) Lipocine's initial application for TLANDO was based on its Phase 3 clinical Study of Oral Androgen Replacement (“SOAR” or “Study 13-001”), which evaluated the efficacy and safety of TLANDO. (Id.)

In June 2016, Lipocine received a Complete Response Letter (“CRL”)^[1] from the FDA indicating that its initial NDA for TLANDO could not be approved in its current form because the dosing regime in Lipocine's SOAR study differed significantly from the dosing regimen proposed in the 2015 NDA. (Id. at ¶ 37.) After being informed that its initial application for TLANDO would not be approved, Lipocine met with the FDA in a Post Action Meeting where it was told by the FDA that the proposed dosing regime for TLANDO would need to be validated through additional clinical trials before a new application for TLANDO could be resubmitted. (Id. at ¶ 38.)

In response to the FDA's feedback, Lipocine conducted two additional clinical studies of TLANDO: the Dosing Validation Study (“DV Study”) and the Dosing Flexibility Study (“DF Study”). (Id. at ¶ 39.) In both studies, subjects received 450 mgs of TU per day, but in the DV Study, subjects received the drug in two equally divided doses of 225 mgs of TU, while subjects in the DV Study received the drug in three equally divided doses of 150 mgs of TU. (Id. at ¶ 40.)

The purpose of both studies was to (1) evaluate the proper dosing regimen to achieve the desired levels of testosterone in hypogonadal patients and (2) assess whether administering TLANDO would lead to unsafe levels of testosterone in the body. To assess the safety and efficacy of testosterone replacement candidates, the FDA established predetermined metrics against which the results of a clinical trial can be compared. These metrics, referred to as “endpoints,” measure the average or maximum level of testosterone in the body after a drug has been administered for a set amount of time.

To evaluate the efficacy of a testosterone replacement product the FDA established a primary endpoint for the DV and DF Studies that required at least 75% of TLANDO-treated subjects to achieve a 24-hour average serum testosterone concentration within the range of 3001080 ng/dL upon completion of 24 days of treatment. (Id. at ¶ 42.)

To assess the safety of TLANDO, the FDA also established pre-determined secondary endpoints for the DV and DF Studies that set maximum testosterone concentration limits (“Cmax”) in patients after 24 days of treatment. (Id. at ¶ 43.) To satisfy the FDA's secondary endpoint standards, the DV and DF Studies had to meet the following conditions:

• 85% of subjects with a testosterone Cmax less than or equal to 1,500 ng/dL;

• ≤5% of subjects with a testosterone Cmax between 1,800 and 2,500 ng/dL; and • No subjects with a testosterone Cmax greater than 2,500 ng/dL.

(Id. at ¶ 43.)

On June 19, 2017, Lipocine issued a press release announcing the results of the DV and DF Studies and indicating that it would resubmit its NDA for TLANDO to the FDA in the third quarter of 2017. (Id. at ¶ 44; Decl. of Ryan Blair at Ex. I,^[2] ECF No. 48-10.) In the June 2017 Press Release, Lipocine indicated that TLANDO met the FDA's primary endpoints in the DV Study, with 81% of subjects achieving average testosterone levels within the predetermined range after treatment. (Decl. of Ryan Blair at Ex. I.)

With respect to the FDA's secondary endpoints standards, the June 2017 Press Release indicated that Lipocine had measured maximum testosterone concentrations in patients using two methodologies: Cmax per dose and Cmax per day. With respect to those measures, the press release stated:

In the DV study Cmax per dose analysis, the percentage of subjects with Cmax less than 1500 ng/dL and between 1800 ng/dL and 2500 ng/dL were 85% and 7% respectively. Deviations from the predetermined limits in the DV study were observed in the Cmax per day dose analysis for these thresholds. Only one subject, who was a major protocol violator, exceeded the 2500 ng/dL limit independent of per dose or per day dose analyses.

The DF study met all Cmax thresholds in per dose and per day dose analyses.

(Id.) In August 2017, Lipocine resubmitted its NDA for TLANDO to the FDA based on the results from the DV Study. (Id.)

After receiving the resubmitted NDA for TLANDO, the FDA scheduled a meeting of the Bone, Reproductive, and Urologic Drugs Advisory Committee (“BRUDAC”)^[3] to discuss the pending TLANDO NDA, which was held on January 10, 2018. (Am Compl. at ¶ 45.) Before the January 2018 BRUDAC meeting both Lipocine and the FDA prepared briefing materials for consideration by the BRUDAC panel, which were publicly available. (Id. at ¶ 46.)

In their BRUDAC briefing materials, both Lipocine and the FDA referenced the secondary endpoint results from the DV Study as measured by the per day method and acknowledged that the DV Study did not meet the predetermined secondary endpoints. (Id. at ¶ 46.) The FDA indicated in its BRUDAC briefing that it would seek the advisory committee's input on the relevance of the secondary endpoint findings to the safe use of TLANDO. (Decl. of Ryan Blair at Ex. A, p.5 ECF. No. 48-2.)

Prior to the BRUDAC meeting, on January 5, 2018, Lipocine took out a $10 million loan from Silicon Valley Bank (“SVB Loan”). (Id. at ¶ 55.) Under the terms of the loan, which was set to mature on December 1, 2021, Lipocine was required to pay monthly interest until January 1, 2019, after which Lipocine was required to make equal payments of principal and interest for the remainder of the loan. (Id. at ¶¶ 55-56.) After the initial interest only payments, Lipocine was required to pay $3.33 million of principal each year until the loan matured. (Id. at ¶ 56.) An additional $650,000 final payment was also required at maturity. (Id.)

At the BRUDAC meeting, both Lipocine and the FDA included slides in their presentations that included secondary endpoint data from the DV Study as measured by the per day method. (Am. Compl. at ¶¶ 47-48.) The FDA noted, in its slide presentation, that “the secondary efficacy endpoint was not met for any of the predetermined limits” in the DV Study. (Id. at ¶ 48.) In its slide regarding the secondary endpoint results from the DV Study, the FDA noted that one subject that exceeded the maximum threshold for Cmax (i.e., Cmax > 2,500 ng/dL) had a “history of cholecystectomy, which was one of the exclusion criteria.” (Id.) The slide also noted, however, that it was unclear whether the protocol violation contribute to the Cmax excursion. (Id.)

During its presentation to the BRUDAC panel, the FDA again described the secondary endpoint results of the DV Study on a per day basis and indicated that it would ask the committee to “explore this issue in detail over the course of the day.” (Id. at ¶ 49.)

In its presentation to the BRUDAC panel, Lipocine attempted to justify the Cmax excursions in its DV Study by noting that they were transient and isolated events that were not correlated with adverse effects. (Blair Decl. at Ex. C, p. 36.) It also argued that the FDA's secondary endpoints were primarily developed for products that would provide sustained testosterone at a high level, while the Cmax excursions observed in the DV Study were “a very transient thing.” (Id. at p. 37.)

During the question-and-answer portion of the BRUDAC meeting, a member of the panel asked the FDA whether it agreed with Lipocine that the Cmax excursions in the DV Study were of very short duration and therefore not of great clinical concern. (Blair Decl. at Ex. C., pp. 38-39.) The FDA indicated that the topic was very novel for the FDA and that it was seeking input from the committee on how to handle the Cmax outliers in the DV Study. (Id. at p. 39.) It...