The FDA rejected Pipex Pharmaceuticals Inc.'s new drug application filing for Coprexa (tetrathiomolybdate) in initially presenting neurologic Wilson's disease, but whether that rejection stems from administrative issues within the agency or substantive concerns about the drug remains to be seen.

Steve Kanzer, chairman and CEO of Ann Arbor, Mich.-based Pipex, said on a conference call that the refusal to file letter from the FDA "comes as a great shock to us."

Investors were shocked as well and pushed shares of Pipex (AMEX:PP) down to $1.91 on Tuesday, a loss of $2.10, or 52.4 percent, for the day.

The FDA gave Pipex eight reasons for its decision not to review the Coprexa NDA. Four were formatting and presentation items in the application, which Pipex's regulatory consultant Kenneth King called "administrative" and easily addressable.

The FDA also requested an additional short-term reproductive drug safety study in animals. King said the request "doesn't make much sense from our perspective" since women with Wilson's disease are amenorrheic and thus very unlikely to get pregnant, but he added that Pipex would be willing to conduct such a study, which only would take about three months to complete.

The remaining three issues were more contentious, and Pipex attributed them to the fact that the Coprexa NDA was transferred between FDA divisions after its submission. King indicated that the "binding" agreements reached between Pipex and the first review division during two pre-NDA meetings may not have been communicated adequately to the second review division.

In particular, King said the pre-NDA meetings specifically addressed the chemistry, manufacturing and controls (CMC) section of the NDA, yet the refusal-to-file letter questioned the adequacy of the analytical methodology used to characterize the active pharmaceutical ingredient of Coprexa.

Even more troubling, the FDA raised questions regarding the adequacy of evidence supporting the safety and efficacy of Coprexa. Again, King said those issues were addressed in the pre-NDA meeting and called the questions "very surprising." He also noted that the FDA said it appears the safety and efficacy data may be inadequate, but he argued that use of the word "appears" makes the questions "a review issue, not a file issue."

Coprexa is an oral, small-molecule drug designed to reduce free copper in blood serum, which is toxic and can contribute to central nervous system and fibrotic diseases. In Wilson's disease, a rare genetic disorder, free copper builds up in the body and causes neurologic damage that may become fatal if not treated. Kanzer said that existing treatments like the copper chelators penicillamine and trientine can worsen neurologic damage as the excess copper they liberate from the liver enters the bloodstream.

Pipex based its NDA, filed last November, on two trials conducted by the doctor who developed Coprexa at the University of Michigan. One trial was a 55-patient open-label study, and the other was a 48-patient randomized, double-blind trial comparing the drug to trientine. In both trials, Coprexa lessened neurological deterioration.

Although Pipex didn't conduct the trials itself, King said the FDA previously had said the studies "appeared to be adequate" to support an NDA. The safety and efficacy questions indicate otherwise, but King maintained that a placebo-controlled Phase III study "borders on the verge of being unethical" to Wilson's patients.

Pipex requested a meeting with the FDA to discuss the refusal-to-file letter, and the company said that meeting will be scheduled within 30 days. The company's goal is to have both review divisions present at the meeting, to clear up any miscommunications between them, and to convince the FDA that "the questions they have asked are reasonable questions for review but they are not refusal-to-file questions," King said.

If the parties can't reach an agreement on the existing NDA, Pipex will be faced with the choice of either complying with the agency's comments and refiling, or filing over protest. The safety and efficacy questions will be the crucial issue, as Pipex said the agency's other concerns could be addressed within three to six months.

King added that regardless of the path forward, Pipex recognizes that the FDA's questions "will be review issues" and is undertaking the necessary steps to address them.

While working to address the FDA's concerns about Coprexa in Wilson's disease, Pipex also is conducting clinical programs with the drug in idiopathic pulmonary fibrosis, primary biliary cirrhosis and Alzheimer's disease.

Elsewhere in its pipeline, Pipex is working on a Phase II/III program with Trimesta (oral estriol) in multiple sclerosis, a Phase II program with anti-CD4 802-2 (cnsnqic-cyclic) in multiple sclerosis, a Phase II program with Correcta (clotrimazole) in acute pouchitis and a Phase II program with Effirma (oral flupirtine) in fibromyalgia syndrome.

Pipex reported $7.4 million in cash as of Sept. 30, not including a $7 million warrant exercise completed after the close of the quarter. The company burns about $2.2 million per quarter on operating expenses.