Requiem for Eiger Biopharmaceuticals

After 24 years in business, the drug innovator hit the FDA’s approval roadblock

WSJ editorial. 

"Amid the many exciting drug breakthroughs these days, it’s easy to forget that the road of pharmaceutical development is long and perilous. For every successful startup like Moderna, there’s an Eiger Biopharmaceuticals, which last week declared bankruptcy after 24 years in business.

Eiger focused on rare metabolic diseases that lack treatments. The Food and Drug Administration in November 2020 approved its first-in-class therapy for Hutchinson-Gilford progeria syndrome, a fatal genetic disease that leads to premature aging. Afflicted children lose their hair and develop joint pain and other age-related maladies. They typically die by the age of 15.

The disease afflicts only one in four million newborns, and Eiger’s treatment rang up only about $15 million in sales last year. But for a small number of children, the drug extended and improved what otherwise would be a short, difficult life.

In 2021 Eiger looked to test an experimental chronic hepatitis delta drug, peginterferon lambda, as an early outpatient treatment for Covid. At the time, only intravenous-infusion treatments had been authorized. Peginterferon lambda showed broad-spectrum antiviral activity against viruses. A large controlled trial found the treatment reduced the risk of Covid hospitalization by 62% and death by 81% when given to patients within three days of symptoms.

Yet the trial results came too late for the FDA, which told Eiger in autumn 2022 that it was unlikely to meet the agency’s standards for an emergency-use authorization “in the current context of the pandemic.” The FDA suggested Eiger conduct another large trial and apply for traditional approval, which could cost hundreds of millions of dollars.

Eiger’s stock tumbled. Last June it announced it was cutting its workforce by 25% and spending on its hepatitis drug program despite demonstrating success in one Phase 3 trial. Then last autumn Eiger had to halt another late-stage trial because some patients developed adverse events.

These regulatory and scientific setbacks made it difficult to raise fresh capital to finance drug development, especially amid higher interest rates. Prior to Eiger’s bankruptcy filing, its stock was trading at $5 a share, down from $368 in December 2020.

Eiger’s travails are a reminder that drug development is one of the riskiest business ventures, and it comes without taxpayer backstops or subsidies (with the exception of the Covid emergency). Fewer than 10% of drugs that enter clinical trials are approved.

Politicians of both parties grouse that drug prices are too high. But life-saving treatments don’t emerge like miracles from the mist. They take money to fund innovation and luck to survive the government’s regulatory obstacle course. Eiger’s luck and money ran out."