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Alimera Sciences, Inc. suffered a setback when it received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) for its New Drug Application (NDA) for Iluvien. Alimera’s share price was down 8.5% following the news.

Alimera is looking to get Iluvien approved in the U.S. for the treatment of pseudophakic patients suffering from chronic diabetic macular edema (DME) considered insufficiently responsive to available therapies for the disease.

The U.S. regulatory body stated in its CRL that it cannot approve the NDA for Iluvien in its present form after identifying some concerns regarding the benefit-to-risk and safety profile of the candidate. The FDA also asked for additional clinical study results to support Iluvien’s approval.

In addition, the FDA noted some a shortcomings regarding Iluvien’s manufacturing facility. However, Alimera believes that this will not affect its European commercial supply of Iluvien.

The regulatory body also suggested that Alimera should conduct a meeting with the Dermatologic and Ophthalmic Drugs Advisory Committee for further details on this issue. As per Alimera, an Advisory Committee meeting would be held on Jan 27, 2014.

We remind investors that the approval path for Iluvien has been at best rocky in the U.S. This is the third CRL that the company received from the regulatory body. In the first quarter of 2013, Alimera resubmitted an NDA for Iluvien in response to the second CRL received in Nov 2011 from the FDA. The first CRL was received in Dec 2010.

Although the company stated in its press release that it intends to work with the FDA regarding the approval of Iluvien, we remain extremely doubtful of the U.S. approval of the candidate after the receipt of the third CRL.

We note that Alimera had collaborated with pSivida Corp. (PSDV) to develop Iluvien for DME. The association between the two companies dates back to Feb 2005. Iluvien is already approved in the UK, Austria, France, Germany, Portugal and Spain, while in Italy it has been recommended for approval for the treatment of vision impairment associated with chronic DME for patients considered insufficiently responsive to available therapies.

Alimera carries a Zacks Rank #3 (Hold). Stocks such as Actelion Ltd. (ALIOF), AMAG Pharmaceuticals, Inc. (AMAG - Snapshot Report) and Isis Pharmaceuticals, Inc. (ISIS - Analyst Report) currently look better positioned in the pharma space with a Zacks Rank #1 (Strong Buy).

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