May 16, 2018 / 1:10 PM / 9 months ago

UPDATE 3-Evolus investors frown as FDA declines to approve Botox rival

* Evolus expects to bring DWP-450 to market by spring 2019

* Deficiencies not related to clinical or non-clinical matters

* Evolus' shares plunge as much as 35 percent (Adds analyst comments, CEO comments)

By Manas Mishra

May 16 (Reuters) - U.S. health regulators on Wednesday declined to approve Evolus Inc's rival product to Allergan Plc's Botox, citing deficiencies related to the chemistry and manufacturing of its potential treatment for frown lines sending its shares down as much as 35 percent.

The company pushed its estimate for the launch of the drug, DWP-450, to the spring of next year. "What we're going to work with from now to the launch date is how we create a value proposition around the product," Chief Executive Officer David Moatazedi told Reuters, adding he viewed DWP-450 as the "first true alternative to Botox cosmetic."

The deficiencies that were communicated by the U.S. Food and Drug Administration in a so-called complete response letter were "manageable", according to CEO Moatazedi, who joined the company earlier this month after serving as U.S. head of Allergan's medical aesthetics business.

The issues cited by the FDA, were isolated to items related to chemistry, manufacturing, and controls processes, and none related to clinical or non-clinical matters, the company said.

Analysts believe Evolus would be able to meet its new timeline for the launch of the product but said a shorter delay may have been anticipated.

Evolus's DWP-450, a Botox-like treatment, is a botulinum toxin injection to treat glabellar lines or frown lines in adult patients.

Allergan's Botox is the market leader for the treatment of wrinkles and frown lines, but threat of looming competition for the blockbuster treatment has put some pressure on the drugmaker. In February, Revance Therapeutics teamed up with Mylan NV to develop a biosimilar of Botox.

Mizuho analyst Irina Koffler said the delay in approval for DWP-450 would allow Allergan more time to prepare "competitive responses".

Allergan's shares were up 2 percent in late afternoon trading.

On Wednesday, Evolus said its partner Daewoong Pharmaceutical Co received a favorable inspection report from the FDA for its manufacturing facility, which makes DWP-450.

This comes after the agency had outlined violations at the company's facility producing the drug following inspections in 2017.

"The headline today is masking one very important piece of good news for Evolus, which is that the FDA has issued a favorable Establishment Inspection Report," Cantor Fitzgerald analyst Louise Chen said.

Chen added that the remaining steps for approval of DWP-450 were review of the FDA's decision and labeling discussions.

Evolus expects to respond to the FDA with a complete submission within 90 days.

Shares of Evolus, which went public about three months ago, were trading down 20.4 percent at $11.67 in afternoon trading. (Reporting by Manas Mishra in Bengaluru; Editing by Shailesh Kuber)

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