Less than three months after receiving an FDA approvable letter, Insmed Inc.'s iPlex gained the agency's blessing, becoming the second orphan drug approved this year to treat short stature in children due to severe primary insulin-like growth factor-1 deficiency.

IPlex also was approved in the treatment of children with growth hormone deletion who have developed neutralizing antibodies to growth hormone. Insmed expects to launch the product with its own sales force in the second quarter of next year.

"This marks a historic day for Insmed, and a major triumph for physicians and children alike," Geoffrey Allan, president and CEO of the Richmond, Va.-based company, said in a conference call. "It's a culmination of many years of work by many dedicated people."

Shares of Insmed (NASDAQ:INSM) gained 15 cents, or 10 percent, Tuesday to close at $1.64.

IPlex (mecasermin rinfabate) is a human recombinant of the naturally occurring protein complex of insulin-like growth factor-1 (IGF-1) and insulin-like growth factor binding protein-3 (IGFBP-3). It is intended to treat patients with extreme short stature, defined as a baseline height or three or more standard deviations below the normal mean. An estimated 6,000 children in the U.S. suffer from severe primary IGF deficiency, characterized by abnormally low blood IGF-1 levels in the presence of normal or elevated endogenous growth hormone.

Despite the approvable letter, the fate of Insmed's drug had remained up in the air since the Aug. 31 approval of Increlex, developed by South San Francisco-based Tercica Inc. That prompted worries that iPlex would have to stay off the market for seven years until Increlex's marketing exclusivity as an orphan drug expired. (See BioWorld Today, Sept. 1, 2005; Sept. 29, 2005.)

In its approval letter to Insmed, the FDA did not say what distinguished iPlex from its chief competitor, Increlex, or why the agency conferred orphan status to iPlex, Allan said, adding that the one differentiating claim seems to be the drugs' dosing schedules.

"Our drug is given once a day and doesn't specify the time around food intake," he said.

Increlex (rhIGF-1, mecasermin [rDNA origin] injection), is delivered via twice-daily subcutaneous injections, around morning and evening meals.

The package insert for Tercica's drug specifies long-term use, but Insmed said it anticipates its iPlex also will be used as a long-term treatment option.

Following news of iPlex's approval, shares of Tercica (NASDAQ:TRCA) tumbled 29 percent, losing $2.88 to close at $7.02.

However, the company, which acquired rights to develop and commercialize Increlex from South San Francisco-based Genentech Inc., is moving forward with its plan to launch its drug next month.

"We remain highly confident in our ability to successfully commercialize Increlex," said Tercica spokeswoman Kathleen Rinehart. "We've got a full sales force in place, and we're on track for the launch."

"When you look at coming into the market, you plan for all different scenarios," she told BioWorld Today. "We've always planned to be competing with the growth hormone companies, as well as with another product coming on the market."

But, with iPlex and Increlex, the competition started long before the products gained regulatory approval. On the way to the FDA, Insmed and Tercica filed lawsuits, injunctions and citizen complaints in attempts to prevent the competing product from hitting the market. The source of those attempts, a patent infringement lawsuit filed more than a year ago, remains pending. That complaint alleges that Insmed's drug infringes on Tercica's intellectual property involving IGF-1.

Rinehart said the case is scheduled to go before a jury in late 2006.

Earlier this month, Tercica filed another suit against Insmed, this time claiming that Insmed publicly disseminated unlawful information regarding Tercica's drug. Insmed has argued that the case is without merit and announced its intention to defend against the allegations.