Shares of Savient Pharmaceuticals Inc fell 36 percent on Monday, a day after U.S. regulators declined to approve its experimental gout drug Krystexxa.
Savient shares were down $4.21 to $11.38 in early-morning trade on Nasdaq. They earlier touched a low of $10.
Our confidence in Krystexxa ultimate approval remains high as the complete response letter included draft labeling and no requirement for additional clinical trials, Cowen & Co analyst Eric Schmidt wrote in a note to clients.
Savient said on Sunday the U.S. Food and Drug Administration issued a complete response letter, saying the agency cannot approve the drug at this time.
The FDA cited deficiencies with the chemistry, manufacturing and controls (CMC) section of the company's marketing application, Savient said.
There are five areas addressed within the complete response letter: CMC, BTG-Israel facility inspection observation remediation, proposed labelling, proposed risk evaluation and mitigation strategy or REMS submission and follow-on safety update, the company said in a conference call on Monday.
Cowen's Schmidt said the FDA noted that the manufacturing process was different from the process used to generate drug for the late-stage trials and Savient will now revert to and revalidate the original manufacturing process in order to address this issue.
In terms of the REMS program, Krystexxa will require a medication guide to ensure safe use, and a communication guide for prescribers to warn of severe infusion reactions, the analyst said.
The company said it plans to resubmit its application to the FDA by early 2010.
(Reporting by Toni Clarke in Boston and Anand Basu in Bangalore; Editing by Maju Samuel)