CALDERWOOD & HARKNESS LLP 1700 Pennsylvania Avenue, N.W., Suite 800 Washington, D.C. 20006
PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
MEMORANDUM
I. PURPOSE
This memorandum is prepared at the request of Penterra Pharmaceuticals Corp. ("PPC" or "Penterra") and is intended to provide a comprehensive analysis of Penterra's regulatory options for pursuing a supplemental New Drug Application ("sNDA") for Velonatib (NDA No. 215-847) for the chronic plaque psoriasis indication, following the top-line results of the CLARION-3 Phase III confirmatory trial announced on November 17, 2022.
The analysis set forth herein incorporates feedback and direction received during the November 21, 2022 working group call among Penterra Regulatory Affairs (Dr. Karen Hessler and her team), Calderwood & Harkness LLP ("C&H"), and Callendar Baines Group LLC ("CBG"). We have also reviewed and referenced input provided by Dr. Priya Sundaram, Managing Director at CBG, and Dr. Neil Oxborough, Principal Consultant (biostatistics) at CBG, with respect to clinical trial design and biostatistical considerations arising from the CLARION-3 data.
The purpose of this memorandum is threefold. First, we set forth the current status of the Velonatib psoriasis clinical development program in light of the CLARION-3 results and the evidentiary standard that the U.S. Food and Drug Administration ("FDA") communicated at the Type B Pre-sNDA meeting in May 2022. Second, we present and evaluate three distinct regulatory paths forward — (A) a redesigned confirmatory trial, (B) supplemental analysis of existing data, and (C) pausing the program to reassess — analyzing the strengths, weaknesses, regulatory risks, timelines, and costs associated with each option. Third, we provide a recommended course of action, together with guidance on the status of labeling work product, coordination with Penterra's other advisors, and ancillary regulatory and disclosure considerations.
This memorandum is protected by the attorney-client privilege and the work-product doctrine, and should not be disclosed to any third party without the prior written consent of both Penterra's General Counsel and Calderwood & Harkness LLP.
II. CURRENT STATUS OF THE CLINICAL PROGRAM
A. CLARION-3 Top-Line Results
CLARION-3 was a Phase III, double-blind, randomized, placebo- and active-comparator-controlled confirmatory study designed to evaluate the efficacy and safety of Velonatib 10 mg administered orally once daily in adult patients with moderate-to-severe chronic plaque psoriasis. The study enrolled a total of 698 patients randomized across three treatment arms (Velonatib 10 mg, adalimumab biosimilar [active comparator], and placebo), at approximately 112 clinical sites in the United States, Canada, and the European Union. The study was conducted under IND No. 128,934 and was designed in consultation with FDA, incorporating the endpoint structure that the Division of Dermatology and Dentistry, Office of Immunology and Inflammation, Center for Drug Evaluation and Research ("CDER"), communicated at the Type B Pre-sNDA meeting held on May 4, 2022.
The co-primary efficacy endpoints of CLARION-3, as prospectively defined in the protocol and statistical analysis plan, were (1) the proportion of patients achieving at least a 90% improvement from baseline in the Psoriasis Area and Severity Index ("PASI-90") at Week 16, and (2) the proportion of patients achieving a static Physician Global Assessment ("sPGA") score of 0 (clear) or 1 (almost clear) at Week 16. Superiority of Velonatib 10 mg was to be demonstrated against both placebo and the adalimumab biosimilar active comparator on both co-primary endpoints, with a hierarchical testing procedure to control the overall Type I error rate.
Top-line results announced on November 17, 2022, were as follows:
Co-Primary Endpoint #1 — PASI-90 at Week 16:
• Velonatib 10 mg: 43.9% of patients achieved PASI-90
• Adalimumab biosimilar: 39.7% of patients achieved PASI-90
• Placebo: 8.3% of patients achieved PASI-90
• Velonatib 10 mg vs. adalimumab biosimilar: p = 0.174
• Result: NOT MET. The difference between Velonatib 10 mg and the adalimumab biosimilar did not reach statistical significance on the PASI-90 co-primary endpoint. While Velonatib demonstrated a numerically higher response rate than the active comparator (43.9% vs. 39.7%), the 4.2 percentage-point difference was insufficient to achieve statistical significance at the pre-specified alpha level.
Co-Primary Endpoint #2 — sPGA 0/1 at Week 16:
• Velonatib 10 mg: 52.6% of patients achieved sPGA 0/1
• Adalimumab biosimilar: 43.1% of patients achieved sPGA 0/1 (Velonatib vs. adalimumab: p = 0.003)
• Placebo: 6.2% of patients achieved sPGA 0/1 (Velonatib vs. placebo: p < 0.001)
• Result: MET. Velonatib 10 mg demonstrated statistically significant superiority over both placebo and the adalimumab biosimilar on the sPGA 0/1 co-primary endpoint.
Key Secondary Endpoint — PASI-75 at Week 16:
• Velonatib 10 mg: 69.8% of patients achieved PASI-75
• Adalimumab biosimilar: 62.1% of patients achieved PASI-75 (Velonatib vs. adalimumab: p = 0.012)
• Placebo: 10.5% of patients achieved PASI-75
• Result: MET. Velonatib 10 mg demonstrated statistically significant superiority over both placebo and the adalimumab biosimilar on the PASI-75 key secondary endpoint.
In summary, CLARION-3 demonstrated clinically meaningful and statistically significant superiority of Velonatib 10 mg over both placebo and active comparator on the sPGA 0/1 co-primary endpoint and the PASI-75 key secondary endpoint. However, the study failed to achieve its other co-primary endpoint — PASI-90 at Week 16 — in the comparison against the adalimumab biosimilar. Because the study design required both co-primary endpoints to be met for the overall study to be considered positive, CLARION-3 must be classified as a failed confirmatory trial for purposes of the sNDA filing.
B. FDA's Stated Evidentiary Standard
The regulatory context in which CLARION-3 was designed is critical to understanding the significance of the trial's outcome and the constraints on Penterra's path forward.
At the Type B Pre-sNDA meeting held on May 4, 2022 (Meeting ID: FDA-2022-M-1743), Penterra met with the Division of Dermatology and Dentistry, Office of Immunology and Inflammation, CDER, to discuss the proposed sNDA submission strategy for the chronic plaque psoriasis indication. During that meeting, the Division communicated several positions that are directly relevant to the current analysis:
First, the Division stated that both co-primary endpoints in the confirmatory trial must be met in order for the confirmatory trial data to support the sNDA filing. The Division emphasized that because Penterra was seeking to add a new therapeutic indication for an already-approved compound — rather than filing an original NDA — the evidentiary standard for the confirmatory trial needed to be rigorous and unambiguous.
Second, the Division specifically requested that PASI-90 at Week 16 be included as a co-primary endpoint in the confirmatory study. The Division cited evolving standards in the psoriasis therapeutic area, noting that newer biologic therapies (particularly IL-17 and IL-23 inhibitors) had demonstrated high rates of PASI-90 and even PASI-100 responses, and that the Division's expectation for new entrants to the psoriasis market had accordingly risen. The Division indicated that a PASI-75-only primary endpoint, while historically acceptable, would no longer be considered sufficient for a confirmatory trial in moderate-to-severe chronic plaque psoriasis.
Third, Penterra agreed to this endpoint structure at the Type B meeting. The agreement was reflected in the official minutes of the meeting, which were finalized on June 7, 2022, and in Penterra's subsequent protocol amendment incorporating the PASI-90 co-primary endpoint.
Because PASI-90 at Week 16 was not met in CLARION-3, the trial data do not satisfy the evidentiary standard that FDA communicated and that Penterra accepted at the Type B Pre-sNDA meeting. This is a critical constraint on the analysis that follows: any regulatory path forward must account for the fact that FDA's stated standard — agreed to by both parties — was not achieved.
C. CLARION-2 Standing Alone
The first pivotal study in the Velonatib psoriasis program, CLARION-2, enrolled 742 patients and was completed in April 2022. CLARION-2 was a Phase III, randomized, double-blind, placebo-controlled study that met both of its co-primary endpoints robustly:
• PASI-75 at Week 16: Velonatib 10 mg: 71.5% vs. Placebo: 9.1% (p < 0.001)
• sPGA 0/1 at Week 16: Velonatib 10 mg: 58.3% vs. Placebo: 5.7% (p < 0.001)
The CLARION-2 results were unambiguously positive and demonstrated a large treatment effect of Velonatib relative to placebo across both co-primary endpoints. The magnitude and consistency of the treatment effect in CLARION-2 were among the factors that supported Penterra's decision to proceed with the confirmatory CLARION-3 trial and to engage with FDA on the sNDA pathway.
However, a single pivotal trial is generally insufficient to support an efficacy supplement for a new indication under Section 505(b) of the Federal Food, Drug, and Cosmetic Act ("FD&C Act"). FDA regulations and guidance provide that substantial evidence of effectiveness typically requires data from adequate and well-controlled investigations, and the agency's longstanding practice — reflected in its guidance documents and the statutory framework — is to require at least two adequate and well-controlled clinical trials to support a new indication, except in extraordinary circumstances. Circumstances in which a single pivotal trial may be sufficient include situations where the trial demonstrated a large treatment effect of high statistical significance, exhibited a high degree of internal consistency across subgroups and endpoints, and was supported by compelling independent evidence from other sources. See FDA Guidance for Industry, Providing Clinical Evidence of Effectiveness for Human Drug and Biological Products (May 1998).
In the present case, while CLARION-2's results are strong and internally consistent, the study was placebo-controlled only and did not include an active comparator arm — a design feature that FDA specifically requested for the confirmatory study. Moreover, with the CLARION-3 failure now part of the evidentiary record, a single-study filing based on CLARION-2 alone would carry an additional burden: Penterra would need to explain why the confirmatory study failed and why CLARION-2 nevertheless provides sufficient evidence of effectiveness. This is a substantially more difficult position than if CLARION-3 had never been conducted, because FDA would view the failed confirmatory trial as relevant evidence bearing on the overall assessment of the product's efficacy profile.
Accordingly, it is our assessment that CLARION-2 alone does not provide an adequate basis for filing the psoriasis sNDA in the current regulatory environment, and that the sNDA cannot be submitted on the existing data package.
III. REGULATORY OPTIONS
We have identified three principal regulatory options for Penterra to consider. Each option is analyzed below in terms of its description, design considerations (where applicable), timeline, cost, regulatory risk, and our recommendation.
Option A: Redesigned Confirmatory Trial (CLARION-3R)
Description. Under this option, Penterra would design and conduct a new Phase III confirmatory study — designated CLARION-3R — with a modified trial design that addresses the endpoint and powering issues that contributed to the failure of CLARION-3. CLARION-3R would serve as the second adequate and well-controlled clinical trial required to support the psoriasis sNDA, alongside the successful CLARION-2 results.
The central premise of this option is that the CLARION-3 failure was attributable to the selection of PASI-90 as a co-primary endpoint requiring superiority over the active comparator, and that a trial with a revised endpoint structure — better calibrated to Velonatib's demonstrated efficacy profile in psoriasis — can generate the data needed to meet FDA's evidentiary standard.
Endpoint Selection. The failure of PASI-90 as a co-primary endpoint in CLARION-3 carries important implications for the design of a successor trial. The CLARION-3 data suggest that Velonatib's efficacy in chronic plaque psoriasis, while clinically meaningful and statistically significant relative to placebo, may not consistently demonstrate a statistically significant margin of superiority over an active comparator at the more stringent PASI-90 response threshold. The observed 4.2 percentage-point difference (43.9% vs. 39.7%) in PASI-90 rates between Velonatib and the adalimumab biosimilar, while numerically favoring Velonatib, was insufficient to reach statistical significance in a 698-patient trial. This outcome is consistent with the hypothesis that the treatment effect delta between Velonatib and adalimumab narrows at higher PASI response thresholds, even as Velonatib demonstrates clear superiority at PASI-75 (7.7 percentage-point difference, p = 0.012) and sPGA 0/1 (9.5 percentage-point difference, p = 0.003).
PASI-75 at Week 16 remains a well-established, FDA-accepted primary efficacy endpoint in psoriasis clinical trials and has served as the primary endpoint in numerous approved NDAs and sNDAs in this therapeutic area. Crucially, PASI-75 was met robustly in both CLARION-2 (71.5% vs. 9.1% placebo, p < 0.001) and CLARION-3 (69.8% vs. 10.5% placebo; 69.8% vs. 62.1% adalimumab biosimilar, p = 0.012). The consistency of Velonatib's PASI-75 performance across both Phase III studies provides confidence that this endpoint can serve as a reliable primary measure of efficacy in a redesigned confirmatory trial.
Accordingly, the proposed revised endpoint structure for CLARION-3R is as follows:
• Primary endpoint: PASI-75 at Week 16 (superiority of Velonatib 10 mg vs. placebo)
• Key secondary endpoint: PASI-90 at Week 16 (analysis of Velonatib 10 mg vs. placebo and vs. adalimumab biosimilar, with appropriate multiplicity adjustment)
• Additional secondary endpoints: sPGA 0/1 at Week 16; PASI-100 at Week 16; DLQI improvement; onset of response (PASI-75 over time); durability of response through Week 52
This revised structure aligns with endpoints accepted by FDA in other recent psoriasis NDAs and sNDAs, including approvals for IL-23 inhibitors where PASI-75 or sPGA 0/1 served as co-primary endpoints and PASI-90/PASI-100 data were presented as key secondary analyses. Importantly, the proposed structure also acknowledges the competitive landscape context: by retaining PASI-90 as a key secondary endpoint, Penterra will generate the PASI-90 data that prescribers, payers, and guideline bodies increasingly expect, even if that data is not the gatekeeper for regulatory success.
We recognize, however, that this approach entails a calculated departure from the endpoint structure that FDA's Division of Dermatology and Dentistry requested at the May 2022 Type B meeting. Obtaining explicit FDA agreement on the revised endpoint structure before protocol finalization is essential, as discussed further below.
Sample Size. CLARION-3 enrolled 698 patients across three treatment arms. Dr. Neil Oxborough of CBG, in his capacity as the program's principal consulting biostatistician, has performed preliminary power calculations based on the observed effect sizes from CLARION-3. Dr. Oxborough estimates that a target enrollment of approximately 950 patients would provide greater than 90% statistical power to detect a statistically significant difference in PASI-75 at Week 16 between Velonatib 10 mg and the adalimumab biosimilar, assuming the observed effect sizes from CLARION-3 are representative of the true treatment effect. This represents an approximately 36% increase over CLARION-3 enrollment.
The increased sample size serves multiple purposes. First, it provides robust power for the primary PASI-75 analysis against both placebo and active comparator. Second, it enhances the precision of the PASI-90 key secondary endpoint analysis, increasing the likelihood of demonstrating a statistically significant difference at the PASI-90 threshold even in the key secondary analysis — a result that, while not required for regulatory success under the proposed endpoint hierarchy, would be highly valuable commercially and scientifically. Third, the larger safety database contributes to a more comprehensive integrated safety analysis across the CLARION program, which will be important for the sNDA submission and for the REMS assessment that FDA has indicated will be required.
Dr. Oxborough's preliminary power calculations should be refined following finalization of the CLARION-3R protocol, and the final sample size should be determined in consultation with CBG's biostatistics team and Penterra's clinical operations group. The 950-patient estimate should be treated as a working assumption for planning and budgeting purposes.
Active Comparator Design
We recommend retaining the adalimumab biosimilar comparator arm in CLARION-3R. At the May 2022 Type B meeting, FDA specifically requested that the confirmatory trial include an active comparator, and omitting the active comparator arm from a redesigned study would likely raise concerns with the Division and could be perceived as an attempt to lower the evidentiary bar. Additionally, active comparator data are increasingly expected by payers, guideline bodies, and prescribers in the psoriasis therapeutic area, and generating this data in a prospective, well-controlled study is strategically important for Velonatib's commercial positioning.
The revised study design should, however, recalibrate the role of the active comparator in the statistical hierarchy. In CLARION-3, the co-primary endpoint required statistical significance on a superiority comparison against the active comparator at the PASI-90 threshold — a demanding standard that the trial was not adequately powered to meet given the observed effect size. In CLARION-3R, the proposed approach is to use a superiority framework against placebo for the primary endpoint (PASI-75 at Week 16), with the active comparator comparison as a key secondary analysis. This restructuring preserves the scientific and commercial value of the active comparator data while avoiding the regulatory vulnerability that characterized the CLARION-3 design — namely, conditioning the overall success of the study on a superiority comparison against an active comparator at a highly stringent response threshold.
The three-arm design (Velonatib 10 mg, adalimumab biosimilar, placebo) should be retained, with randomization ratios to be determined in consultation with CBG and finalized following the FDA Type B meeting. A 2:2:1 randomization ratio (Velonatib : adalimumab : placebo) may be considered to maximize enrollment in the active treatment arms while maintaining an adequate placebo arm for the primary analysis; however, this decision should be informed by ethical considerations, enrollment feasibility, and FDA input.
Timeline. The projected timeline for Option A, from current date through potential sNDA approval, is as follows:
• IND amendment submission for CLARION-3R: Estimated Q1 2023 (target: March 2023). The IND amendment would include the revised protocol, updated statistical analysis plan, and supporting documentation for the redesigned study.
• Type B meeting with FDA: Request to be submitted in Q1 2023; meeting anticipated Q1–Q2 2023. The meeting should address the CLARION-3R design, present the rationale for the revised endpoint structure, and seek FDA agreement on the primary endpoint (PASI-75 at Week 16) and key secondary endpoint (PASI-90 at Week 16). FDA's target timeline for granting and scheduling a Type B meeting is approximately 75 days from receipt of the meeting request, though actual scheduling may vary.
• CLARION-3R study initiation: Assuming FDA agreement on the protocol and timely completion of site selection and activation, study initiation is projected for Q3 2023.
• Treatment period and follow-up: The 16-week treatment period, followed by any protocol-specified safety follow-up, data cleaning, database lock, and statistical analysis, is expected to span approximately 12–14 months from first patient enrolled to top-line data availability.
• Top-line data availability: Projected H2 2024, assuming timely enrollment and no significant enrollment delays.
• sNDA filing: If CLARION-3R is positive, the sNDA could be filed within approximately 3–4 months of top-line data availability, allowing time for labeling finalization, REMS assessment preparation, and submission assembly.
• PDUFA goal date: Assuming a standard 10-month PDUFA review clock following an accepted filing, the earliest potential PDUFA goal date would fall in approximately mid-to-late 2025.
This timeline assumes no significant delays in FDA meeting scheduling, site activation, patient enrollment, or regulatory review. The projected timeline should be updated as milestones are achieved.
Cost. PPC's preliminary estimate of the cost of conducting CLARION-3R is approximately $85–110 million, based on Dr. Hessler's initial assessment of the trial scope and complexity. This estimate includes direct clinical trial costs (site fees, investigator grants, drug supply, CRO services, monitoring, data management, and biostatistical analysis) but does not include Penterra's internal personnel costs or the incremental regulatory costs associated with sNDA labeling, REMS assessment preparation, and submission assembly, which would be incurred regardless of the trial and are budgeted separately.
The cost estimate should be refined by PPC's clinical operations team following finalization of the CLARION-3R protocol, selection of the contract research organization(s), and completion of site feasibility assessments. We note that the $85–110 million range is consistent with the cost profile of similarly sized Phase III dermatology trials in the current market, but the range is broad and the final figure will depend on numerous variables including the number and geographic distribution of clinical sites, enrollment rates, and the duration of the treatment and follow-up periods.
Additional costs that should be factored into PPC's overall investment analysis include the cost of the FDA Type B meeting preparation (estimated at approximately $250,000–$400,000 in CBG and C&H fees), the cost of the IND amendment submission, and the cost of ongoing regulatory maintenance during the CLARION-3R enrollment and data collection period.
Regulatory Risk Assessment
We assess the regulatory risk of Option A as moderate.
The primary risk is that FDA may not agree to the proposed revised endpoint structure. Specifically, FDA's Division of Dermatology and Dentistry may maintain its position — articulated at the May 2022 Type B meeting — that PASI-90 should serve as a primary or co-primary endpoint in the confirmatory study, rather than a key secondary endpoint. If FDA insists on retaining PASI-90 as a co-primary endpoint, Penterra would face a difficult choice: either proceed with PASI-90 as a co-primary in a larger trial (hoping that the increased sample size of approximately 950 patients provides adequate power to detect statistical significance at the PASI-90 threshold based on the CLARION-3 observed effect size), or escalate the issue within CDER or seek alternative regulatory strategies.
Dr. Oxborough's preliminary analysis suggests that a 950-patient trial with PASI-90 as a co-primary endpoint would have approximately 55–65% power to detect a statistically significant difference between Velonatib and the adalimumab biosimilar at the PASI-90 threshold, based on the 4.2 percentage-point difference observed in CLARION-3. This power level is below the conventional 80% threshold and substantially below the >90% power projected for the PASI-75 primary endpoint. Accordingly, if FDA insists on PASI-90 as a co-primary, the risk of a second failed study would remain material, and Penterra would need to carefully evaluate whether to proceed under those conditions or to advocate more forcefully for the revised endpoint hierarchy.
A secondary risk is enrollment timeline: the psoriasis clinical trial landscape is competitive, and enrolling 950 patients in a timely manner may require expanded geographic reach and additional clinical sites, which could increase costs and introduce site-quality variability.
A third risk is that during the CLARION-3R enrollment period, FDA could issue new class-wide guidance on JAK inhibitors — building on the September 2021 labeling requirements — that could impose additional clinical study requirements, modify the boxed Warning language, or otherwise complicate the sNDA filing. While this risk is not unique to Option A and would affect any path forward, it is worth noting because the CLARION-3R timeline extends through at least H2 2024.
Despite these risks, we believe Option A represents the most viable path to approval for the psoriasis indication. The risks identified above are manageable through proactive engagement with FDA, careful trial design, and contingency planning.
Recommendation. We recommend Option A as the primary regulatory strategy. This option directly addresses the CLARION-3 failure by redesigning the confirmatory trial with a primary endpoint that Velonatib has consistently and robustly met, while retaining the PASI-90 data as a key secondary measure and preserving the active comparator design that FDA requested.
The single most important near-term action under Option A is to request a Type B meeting with FDA's Division of Dermatology and Dentistry to discuss the CLARION-3R design and obtain written agreement on the primary endpoint before finalizing the protocol and initiating enrollment. Without FDA alignment on the revised endpoint structure, the risk of a second failed confirmatory study remains unacceptably high. The Type B meeting should be prioritized above all other near-term activities.
Option B: Type A Meeting / Supplemental Analysis of Existing Data
Description. Under this option, Penterra would request a Type A meeting with FDA to explore whether any modified statistical analysis, pooled data from CLARION-2 and CLARION-3, or additional subgroup analyses could be used to overcome the CLARION-3 co-primary endpoint failure and salvage the current data package — thereby avoiding the need for a new confirmatory trial. The premise of this option is that the totality of the clinical evidence from the CLARION program may be sufficient to support the sNDA filing even in the absence of a positive confirmatory study, and that a dialogue with FDA could identify an acceptable analytical framework.
Analysis. We have carefully evaluated this option in consultation with Dr. Sundaram and Dr. Oxborough at CBG, and we do not believe it is a viable regulatory strategy. Our assessment is based on several considerations:
The p-value for PASI-90 is not borderline. The p-value of 0.174 for the PASI-90 comparison between Velonatib and the adalimumab biosimilar represents a definitive failure to achieve statistical significance on a pre-specified co-primary endpoint. This is not a case where the result was p = 0.052 or p = 0.06 — situations where post-hoc sensitivity analyses or minor methodological adjustments might conceivably bring the result across the significance threshold. A p-value of 0.174 is too far from conventional significance levels to be rescued through reanalysis. Any attempt to present supplemental analyses designed to achieve a different result would be viewed by the Division as methodologically unsound and strategically disingenuous.
FDA is unlikely to accept post-hoc analyses to overcome a failed pre-specified endpoint. The regulatory science governing clinical trial interpretation is well-established on this point: when a prospectively defined primary or co-primary endpoint fails, post-hoc reanalysis — regardless of the nominal significance of any alternative analytical approach — does not constitute adequate and well-controlled evidence of effectiveness. This principle is especially powerful in the present context, where the Division itself requested the PASI-90 co-primary endpoint and Penterra agreed to it. FDA would have no incentive and no scientific basis to accept a post-hoc analytical framework that effectively nullifies its own pre-specified evidentiary requirement.
Pooling CLARION-2 and CLARION-3 data raises significant methodological concerns. CLARION-2 and CLARION-3 had different study designs: CLARION-2 was a placebo-controlled study with no active comparator arm, while CLARION-3 was a three-arm study including an adalimumab biosimilar comparator with a different randomization structure. Pooling data from studies with different designs introduces confounding factors and undermines the internal validity of any pooled analysis. FDA's Division of Biometrics would likely raise substantial objections to such pooling in any sNDA review, and the Division of Dermatology and Dentistry has historically been skeptical of cross-study pooling as a substitute for prospective trial results.
FDA's Division of Dermatology and Dentistry has a track record of skepticism toward post-hoc endpoint revisions. The Division has historically maintained a strict approach to endpoint interpretation in dermatology clinical trials, and there is no precedent, to our knowledge, for the Division accepting a post-hoc reanalysis as a basis for overcoming a failed co-primary endpoint in a psoriasis trial. This history reinforces our assessment that a Type A meeting focused on salvaging the existing data would not be productive.
Even nominally significant pooled analyses would be viewed as insufficiently persuasive. Even if a pooled analysis of PASI-90 data across CLARION-2 and CLARION-3 showed nominal statistical significance (which is uncertain given the methodological issues noted above), FDA would likely view such an analysis as hypothesis-generating rather than confirmatory, and therefore insufficient to support approval.
Regulatory Risk Assessment
We assess the regulatory risk of Option B as high, with a very low probability of success as a standalone strategy. The likelihood that FDA would accept any supplemental analysis of the existing data as a substitute for a positive confirmatory trial is, in our judgment, negligible.
Moreover, pursuing this option carries the risk of consuming regulatory capital — that is, the goodwill and credibility that Penterra has built with the Division through its engagement on the Velonatib RA and psoriasis programs. A meeting request perceived by the Division as an attempt to relitigate a clear endpoint failure could damage the working relationship and complicate future interactions, including the Type B meeting that would be critical to the success of Option A.
Finally, pursuing Option B in isolation would delay Penterra's pursuit of a more productive regulatory path. Even if the Type A meeting request were filed immediately, the meeting would not likely be scheduled and completed until Q1 2023, after which any response from FDA would need to be analyzed and discussed. If — as we anticipate — FDA's response is negative, the net effect of Option B would be a delay of several months before Penterra could pivot to Option A and begin the CLARION-3R design process.
Recommendation. We do not recommend pursuing Option B in isolation. The probability of success is too low, and the risks — including delay, regulatory capital expenditure, and damage to the Division relationship — outweigh any potential benefits.
However, if Penterra elects to proceed with Option A, we note that a Type B meeting request (which has a broader scope than a Type A meeting) could appropriately incorporate a brief discussion of CLARION-3 post-hoc findings and subgroup analyses as supportive context for the CLARION-3R design rationale. For example, the briefing document for the Type B meeting could present subgroup analyses showing consistent PASI-75 and sPGA 0/1 responses across key demographic and disease-severity subgroups in CLARION-3, as well as the PASI-90 data from CLARION-2 (which included PASI-90 as a pre-specified secondary endpoint and showed a response rate of 47.2% for Velonatib 10 mg vs. 4.6% for placebo). This data would not be presented as a substitute for a positive confirmatory trial, but rather as part of the totality of evidence supporting the CLARION-3R design and the rationale for the revised endpoint hierarchy. This is a fundamentally different posture from seeking to salvage the existing data package, and we believe it is both strategically sound and consistent with FDA's expectations for a constructive Type B meeting dialogue.
Option C: Pause and Reassess
Description. Under this option, Penterra would place the sNDA effort on indefinite hold and reassess the psoriasis indication strategy in 12–18 months, taking into account the evolving competitive landscape, any new FDA guidance on JAK inhibitors, and Penterra's internal portfolio priorities. CLARION-3R would not be initiated during this period. The decision on whether to proceed with a redesigned confirmatory trial would be deferred until Penterra has greater strategic clarity on the value and feasibility of the psoriasis indication.
Analysis — Advantages
Capital preservation. The most immediate advantage of a pause is the preservation of the approximately $85–110 million investment that CLARION-3R would require. In the current capital markets environment and given PPC's overall financial position, deferring a nine-figure clinical investment until there is greater strategic clarity may be a prudent allocation of resources. This is particularly relevant if Penterra's Board and management team conclude that the probability-adjusted net present value of the psoriasis indication does not justify the near-term investment, given the CLARION-3 setback and the competitive dynamics in the psoriasis market.
Regulatory optionality. A pause allows Penterra to monitor the regulatory environment before committing to a specific trial design. Several developments during the next 12–18 months could meaningfully affect the regulatory path for Velonatib in psoriasis:
• FDA's evolving thinking on JAK inhibitors in dermatology indications, including whether the agency issues additional class-wide guidance beyond the September 2021 labeling requirements;
• Competitor outcomes, including the clinical trial and regulatory results of other JAK inhibitors and biologic therapies seeking psoriasis indications;
• Potential changes in FDA's preferred endpoint hierarchy for psoriasis trials, which could be informed by advisory committee discussions, guideline updates, or approved product reviews; and
• Any legislative or regulatory developments affecting the drug development or approval process more broadly.
By pausing and monitoring these developments, Penterra retains the flexibility to design CLARION-3R with the benefit of updated information, potentially reducing regulatory risk and improving the probability of success.
Patent runway. The Velonatib compound patent (U.S. Patent No. 10,412,XXX, expiring February 2034) and the Velonatib formulation patent (U.S. Patent No. 10,891,XXX, expiring August 2036) provide a long patent runway for the existing rheumatoid arthritis franchise regardless of the psoriasis indication timeline. The compound patent provides approximately 11 years of remaining protection, and the formulation patent extends coverage through mid-2036. This runway means that a 12–18-month delay in pursuing the psoriasis indication does not threaten the core commercial franchise and allows Penterra to approach the psoriasis decision from a position of relative strength rather than urgency.
We note, however, that the provisional method-of-treatment patent application (U.S. Provisional Application No. 63/XXX,XXX, filed August 2022) covering the use of Velonatib for the treatment of psoriasis would need to be converted to a non-provisional application within 12 months of the provisional filing date (i.e., by approximately August 2023) or the priority date would be lost. This is a patent prosecution matter that falls within the scope of Whitfield & Grange LLP's engagement, and we recommend that W&G advise Penterra independently on the provisional-to-non-provisional conversion decision and its interaction with the sNDA timing. The decision to convert the provisional application should not be contingent on the sNDA timeline, as the patent prosecution and regulatory timelines operate independently and the loss of the priority date could have long-term commercial consequences.
Analysis — Risks
Competitive entrenchment. The moderate-to-severe psoriasis market is highly competitive and rapidly evolving. IL-17 inhibitors (secukinumab, ixekizumab, brodalumab, bimekizumab) and IL-23 inhibitors (guselkumab, tildrakizumab, risankizumab) have established strong clinical profiles with high PASI-90 and PASI-100 response rates, favorable dosing intervals, and growing real-world experience. A 12–18-month delay in pursuing the psoriasis indication would allow these competitors to further entrench in the market, potentially reducing the commercial value and differentiation of a velonatib psoriasis indication. By the time CLARION-3R data would become available under a paused scenario (potentially H1–H2 2025 or later), the competitive landscape may have shifted further in favor of established biologics, making it more difficult for Velonatib — an oral JAK inhibitor — to capture meaningful market share even with a favorable efficacy profile.
Regulatory risk from JAK inhibitor class-wide developments. A 12–18-month delay gives FDA more time to potentially impose additional class-wide requirements on JAK inhibitors. Since the September 2021 class-wide labeling changes (which added warnings regarding serious heart-related events, cancer, blood clots, and death based on a post-marketing requirement study of tofacitinib), FDA has continued to scrutinize the JAK inhibitor class. Additional boxed Warning expansions, new REMS elements, or further study requirements could be imposed during the pause period, potentially complicating or adding cost to a future psoriasis sNDA filing.
Commercial and investor impact. Velonatib's FY 2022 U.S. net sales of approximately $1.47 billion represent approximately 67.4% of PPC's total revenue of $2.18 billion, underscoring both the strength of the RA franchise and the company's significant concentration risk. The psoriasis indication represents the most important near-term opportunity for indication diversification and revenue growth. A prolonged pause in the psoriasis program could be perceived negatively by investors and analysts, particularly if competitors continue to advance in the psoriasis space. PPC's market capitalization of approximately $6.3 billion as of December 2022 may be further affected by investor perception of the CLARION-3 failure and the company's response — particularly if the market interprets a pause as a signal that the psoriasis indication is being abandoned or that Penterra lacks confidence in Velonatib's psoriasis efficacy profile.
Internal momentum and organizational capability. Pausing the program carries the risk of losing institutional momentum, clinical trial expertise, and investigator relationships that were built during the CLARION-2 and CLARION-3 programs. Key site investigators may commit to competing clinical trials during the pause period, making re-engagement more difficult and potentially requiring a broader and more expensive site selection process for CLARION-3R.
Recommendation. If Penterra ultimately elects to pause the psoriasis program rather than proceed with CLARION-3R in the near term, we recommend the following measures:
1. Maintain the Calderwood & Harkness engagement on dormant status to allow rapid reactivation of the regulatory and labeling workstreams when Penterra is ready to proceed. Dormancy terms should be agreed and documented to ensure continuity of the attorney-client relationship and preservation of work product.
2. Continue monitoring the following areas during the pause period:
(i) FDA guidance documents and advisory committee proceedings relating to JAK inhibitors, including any developments affecting class-wide labeling, REMS, or study requirements;
(ii) Competitor labeling changes in the psoriasis therapeutic area, including new approvals, supplemental approvals, and labeling revisions for IL-17, IL-23, and JAK inhibitor products;
(iii) FDA's September 2021 class-wide JAK-inhibitor labeling requirements and any further updates, including any additional post-marketing requirement studies or safety communications;
(iv) The pediatric Written Request status and annual reporting obligations, as discussed further in Section VI.A below (deferral granted July 28, 2022; annual progress reports due by September 26 of each year); and
(v) The status of the provisional method-of-treatment patent application and Whitfield & Grange's advice on the conversion timeline.
IV. RECOMMENDED COURSE OF ACTION
Based on our analysis of the three regulatory options set forth above, we recommend Option A (Redesigned Confirmatory Trial), combined with certain elements of Option C in the near term to allow orderly planning and engagement with FDA before committing to trial initiation.
Specifically, we recommend the following course of action:
1. Place the sNDA effort on formal dormancy effective immediately. No further work should be performed on labeling drafts, REMS assessment preparation, submission assembly, or other sNDA-related activities until CLARION-3R data are available and analyzed. All draft work product should be preserved in its current state and filed in accordance with the document hold procedures described in Section V below. This includes the draft USPI, Medication Guide, and all supporting materials prepared by Calderwood & Harkness and reviewed by Penterra Regulatory Affairs through November 2022.
2. Request a Type B meeting with FDA in Q1 2023. The meeting request should be submitted to the Division of Dermatology and Dentistry, Office of Immunology and Inflammation, CDER, and should focus on the following objectives:
(a) Presentation of the CLARION-3R study design, including the proposed primary endpoint (PASI-75 at Week 16), key secondary endpoint (PASI-90 at Week 16), and the rationale for the revised endpoint structure;
(b) Discussion of the CLARION-3 results in context, including supporting subgroup analyses and the totality of evidence from the CLARION program;
(c) Seeking FDA alignment on the revised primary endpoint and the overall CLARION-3R design, including the sample size, active comparator arm, and statistical analysis plan; and
(d) Confirmation that a positive CLARION-3R study, together with the existing CLARION-2 data, would constitute adequate evidence to support the psoriasis sNDA filing.
Callendar Baines Group should lead the preparation of the clinical and biostatistical sections of the briefing document, with Calderwood & Harkness providing legal and regulatory-strategy review of the complete briefing document before submission to FDA.
3. Redesign CLARION-3R with the following key parameters:
• Primary endpoint: PASI-75 at Week 16 (superiority of Velonatib 10 mg vs. placebo)
• Key secondary endpoint: PASI-90 at Week 16 (Velonatib 10 mg vs. placebo and vs. adalimumab biosimilar)
• Target enrollment: Approximately 950 patients
• Comparator arms: Adalimumab biosimilar (active comparator) and placebo
• Study design: Double-blind, randomized, three-arm, placebo- and active-comparator-controlled
• Final design to be determined following FDA Type B meeting feedback
4. Submit the IND amendment for CLARION-3R upon FDA alignment on the protocol. The target submission date for the IND amendment is March 2023, contingent on the timing and outcome of the Type B meeting.
5. Initiate CLARION-3R enrollment. Projected initiation is Q3 2023, subject to the timeline considerations discussed in Section III.A above.
6. Reactivate the labeling supplement engagement upon receipt of CLARION-3R top-line data (projected: H2 2024). Upon reactivation, Calderwood & Harkness will:
(a) Prepare a comprehensive regulatory-landscape update memorandum analyzing any developments in FDA guidance, class-wide JAK-inhibitor labeling, and competitor approvals that occurred during the dormancy period;
(b) Update all draft labeling documents (USPI, Medication Guide, and supporting materials) to reflect CLARION-3R efficacy and safety data and any intervening FDA guidance changes;
(c) Finalize the REMS assessment section based on the integrated safety database from the full CLARION program (CLARION-2 and CLARION-3R);
(d) Coordinate with Whitfield & Grange LLP on any patent-related labeling issues, including Orange Book listing requirements and method-of-treatment patent status; and
(e) Support Penterra Regulatory Affairs in assembling and submitting the sNDA.
V. LABELING AND WORK-PRODUCT STATUS
A. Draft Documents on Hold
All draft labeling documents prepared by Calderwood & Harkness in connection with the Velonatib psoriasis sNDA should be placed on formal hold effective as of November 22, 2022, the date on which the working group determined that the sNDA filing timeline would need to be revised in light of the CLARION-3 results. The key drafts currently on file are as follows:
These drafts were prepared by Sean Morrissey and Christopher Aiken, Associates at Calderwood & Harkness LLP, and reviewed by Joel Strauss (C&H Partner) and Dr. Karen Hessler (Penterra SVP, Regulatory Affairs). Review comments from Dr. Hessler's October 28, 2022 markup of Rev. 3 of the USPI draft have been received but not yet incorporated. These comments should be preserved in the file for reference upon reactivation.
Upon reactivation of the labeling engagement (projected upon receipt of CLARION-3R top-line data in H2 2024), these drafts will serve as the starting point for the revised labeling but will require substantial updates, including the following:
• Incorporation of CLARION-3R efficacy and safety data in Section 14.2 (Clinical Studies) and throughout the USPI. All clinical data tables, figures, and narrative descriptions of the clinical program will need to be updated to reflect the CLARION-3R results and to appropriately present the integrated data from CLARION-2 and CLARION-3R. The CLARION-3 data may need to be addressed in some fashion, even though the trial did not meet its co-primary endpoints, depending on FDA's preference and the approach agreed upon at the Type B meeting.
• Population of data placeholders in Section 5.5 (Hepatotoxicity) with integrated safety data from the full CLARION program (CLARION-2 and CLARION-3R). The current Rev. 3 USPI draft contains placeholder brackets for hepatotoxicity incidence data that were to be populated with the integrated safety analysis following CLARION-3; these will now need to include CLARION-3R data.
• Reflection of any intervening changes to FDA's class-wide JAK-inhibitor labeling requirements. Since the September 2021 class-wide labeling changes, the JAK-inhibitor class label has been an area of active regulatory attention. Any additional labeling requirements, boxed Warning modifications, or Warnings and Precautions changes imposed by FDA during the dormancy period will need to be incorporated into the draft USPI and Medication Guide.
• Addressing any new FDA guidance on REMS, boxed Warning language, or Medication Guide content for JAK inhibitors. FDA may issue new guidance or revise existing guidance during the dormancy period that affects the content or format of the REMS assessment, boxed Warning, or Medication Guide. All such developments should be monitored and incorporated upon reactivation.
• Coordination with Whitfield & Grange LLP on patent-related labeling language updates. This includes confirmation of the status of the method-of-treatment patent application, any updates to the Orange Book listing strategy, and review of the patent certification provisions in the USPI as applicable.
B. Coordination with Advisors
The dormancy and anticipated reactivation timeline should be communicated to all advisors involved in the Velonatib psoriasis sNDA effort, as follows:
Callendar Baines Group LLC. CBG, under the direction of Dr. Priya Sundaram (Managing Director) and Dr. Neil Oxborough (Principal Consultant, biostatistics), will take the lead role in the clinical and biostatistical aspects of the CLARION-3R design, including power calculations, sample size determination, endpoint selection rationale, and statistical analysis plan development. Calderwood & Harkness will coordinate with CBG on regulatory strategy and legal review of all FDA meeting materials, including the Type B meeting briefing document and any formal correspondence with the Division. The scope and terms of CBG's engagement for the CLARION-3R design work should be discussed and confirmed separately by Penterra.
Whitfield & Grange LLP. Penterra's patent counsel, Whitfield & Grange LLP ("W&G"), should be informed of the dormancy and the anticipated reactivation timeline. Prior coordination between W&G and C&H on Orange Book listing matters — specifically the confirmation that the Velonatib compound patent (U.S. 10,412,XXX) and formulation patent (U.S. 10,891,XXX) do not require new Orange Book listings in connection with the psoriasis indication — remains valid but should be revisited upon reactivation. Similarly, the labeling language review coordination reflected in W&G's October 3, 2022 correspondence to C&H remains applicable in principle but will need to be updated to reflect any changes in the patent landscape or FDA requirements during the dormancy period. As noted in Section III.C above, W&G should independently advise Penterra on the timeline for converting the provisional method-of-treatment patent application (U.S. Prov. App. No. 63/XXX,XXX) to a non-provisional application.
Thornfield Lewis LLP. C&H notes that Penterra's independent auditor, Thornfield Lewis LLP, may need to be consulted regarding the impact of the CLARION-3 failure and the CLARION-3R redesign timeline on PPC's public financial disclosures. Specifically, PPC's annual report on Form 10-K and quarterly reports on Form 10-Q include pipeline disclosures and risk factor discussions that reference the psoriasis sNDA as a near-term regulatory milestone. These disclosures will need to be updated to reflect the CLARION-3 outcome, the indefinite hold on the sNDA, and the projected CLARION-3R timeline. This is outside the scope of C&H's current engagement, but we flag it for Penterra's attention and recommend that it be coordinated between PPC's General Counsel, Regulatory Affairs, and Thornfield Lewis as part of the year-end financial reporting process.
VI. ADDITIONAL CONSIDERATIONS
A. Pediatric Study Deferral
FDA granted a pediatric study deferral for Velonatib on July 28, 2022, in connection with the pediatric Written Request for studies in the pediatric psoriasis population. Under the terms of the deferral, the deadline for submission of the required pediatric studies is 18 months following approval of the adult psoriasis indication. The deferral remains in effect during the dormancy of the sNDA program, and the 18-month clock will not begin to run until (and unless) the adult psoriasis sNDA is approved.
However, the deferral is subject to an annual reporting obligation: Penterra must submit annual progress reports to FDA describing the status of the pediatric development program, regardless of whether the adult indication has been approved. Annual progress reports are due by September 26 of each year, in accordance with the terms of the deferral and applicable FDA regulations. Penterra must continue to submit these annual reports in a timely manner even during the dormancy period.
Per C&H's September 8, 2022 memorandum on the pediatric study deferral (provided to Dr. Hessler and Ms. Moritani), the first annual progress report under the deferral is due by September 26, 2023. That report should describe the CLARION-3 failure, the CLARION-3R redesign and its projected timeline, and the revised sNDA submission timeline. The report should be prepared by Penterra Regulatory Affairs in coordination with CBG (for clinical trial design updates) and reviewed by C&H before submission.
B. REMS Assessment
Per C&H's September 22, 2022 memorandum on REMS considerations for the psoriasis sNDA (provided to Dr. Hessler, Dr. Becerra, and Ms. Moritani), the sNDA REMS assessment section remains to be finalized upon receipt of confirmatory safety data from the psoriasis clinical program. The REMS assessment is a required component of the sNDA submission and must evaluate whether a Risk Evaluation and Mitigation Strategy is necessary or whether modifications to the existing Velonatib REMS (implemented in connection with the RA NDA approval) are warranted in light of the expanded psoriasis patient population.
At the May 2022 Type B meeting, FDA indicated that a REMS assessment would be required as part of the psoriasis sNDA submission. This position has not been revisited and remains applicable. The REMS assessment will need to be based on the integrated safety database from the full CLARION clinical program — which, under the recommended course of action, will include data from CLARION-2 and CLARION-3R (and potentially safety data from CLARION-3, depending on FDA's preference).
Upon reactivation of the sNDA engagement, the REMS analysis should be updated to reflect:
(i) Any new FDA guidance on REMS for JAK inhibitors issued during the dormancy period;
(ii) The integrated safety database from CLARION-2 and CLARION-3R;
(iii) Any changes to the existing Velonatib REMS for the RA indication that may have occurred during the dormancy period; and
(iv) Any relevant post-marketing safety data from the RA indication that may inform the REMS assessment for the psoriasis population.
C. Securities Disclosure
This engagement does not encompass securities disclosure matters, and C&H is not acting as Penterra's securities counsel. However, we note for Penterra's awareness that the CLARION-3 failure and the CLARION-3R redesign are likely material developments for purposes of PPC's securities disclosure obligations under the Securities Exchange Act of 1934 and applicable SEC regulations. Specifically:
• The CLARION-3 top-line results announced on November 17, 2022, may require disclosure in a Current Report on Form 8-K, to the extent they constitute a material definitive event or a material modification to PPC's clinical development pipeline;
• PPC's Annual Report on Form 10-K for FY 2022 and subsequent Quarterly Reports on Form 10-Q will need to update pipeline disclosures, risk factor discussions, and management's discussion and analysis to reflect the CLARION-3 failure, the hold on the sNDA, and the projected CLARION-3R timeline; and
• Any press releases or investor communications regarding the psoriasis program should be reviewed by PPC's securities counsel for compliance with Regulation FD and other applicable disclosure requirements.
PPC should consult with its securities counsel on the appropriate timing, content, and manner of these disclosures. C&H is available to coordinate with securities counsel to the extent that regulatory or clinical development information within C&H's knowledge is needed for disclosure purposes, subject to appropriate privilege considerations.
VII. CONCLUSION
The CLARION-3 outcome, while a significant setback for the Velonatib psoriasis development program, does not foreclose the psoriasis indication. The trial's failure was limited to a single co-primary endpoint — PASI-90 at Week 16 in the comparison against the adalimumab biosimilar — and must be understood in the context of a study that otherwise demonstrated clinically meaningful and statistically significant efficacy on the sPGA 0/1 co-primary endpoint (p = 0.003 vs. adalimumab) and the PASI-75 key secondary endpoint (p = 0.012 vs. adalimumab).
The clinical data from CLARION-2 remain robust and unambiguous, demonstrating large treatment effects across all efficacy endpoints. CLARION-3, notwithstanding the co-primary endpoint failure, generated valuable efficacy and safety data that will inform the design of a successor confirmatory trial and contribute to the integrated data package supporting the sNDA.
A redesigned confirmatory trial — CLARION-3R — with an appropriately powered sample size (approximately 950 patients), an FDA-aligned primary endpoint (PASI-75 at Week 16), and the retention of PASI-90 as a key secondary endpoint and the adalimumab biosimilar as an active comparator, represents the strongest and most viable path to regulatory approval. The critical near-term step is to obtain FDA's agreement on the revised endpoint structure through a Type B meeting before protocol finalization.
Calderwood & Harkness LLP stands ready to support Penterra through the near-term dormancy period, including coordination with Callendar Baines Group on the Type B meeting preparation and CLARION-3R design, and to reactivate the labeling supplement engagement promptly upon receipt of CLARION-3R top-line data.
We welcome the opportunity to discuss this memorandum and the recommended course of action with Penterra's leadership team at your earliest convenience.
This memorandum is a privileged and confidential attorney-client communication and attorney work product prepared by Calderwood & Harkness LLP for Penterra Pharmaceuticals Corp. It is not intended for distribution to, or reliance by, any third party. © 2022 Calderwood & Harkness LLP. All rights reserved.
CALDERWOOD & HARKNESS LLP
By: ________
Joel Strauss Partner
By: ________
Sean Morrissey Associate
TO:
Dr. Karen Hessler, SVP, Regulatory Affairs, Penterra Pharmaceuticals Corp.
Dr. Tomás Becerra, VP, Medical Affairs — Immunology, Penterra Pharmaceuticals Corp.
FROM: