A regulator’s decision drained the market’s enthusiasm for the company.
The end of the trading week likely can’t come fast enough for Vanda Pharmaceuticals (VNDA -6.06%). The commercial-stage biotech’s stock took an almost 6% hit on Thursday, following some dispiriting news about one of its investigational drugs. That compared unfavorably to the 1.7% increase in the S&P 500 index during that session.
Stomach-disorder drug rejected
Bad news about a pipeline product is a fact of life in the biotech and pharmaceutical industries, but it’s always an uncomfortable experience for companies and their investors. Before market open Thursday, Vanda disclosed that the U.S. Food and Drug Administration (FDA) declined to approve the company’s New Drug Application (NDA) for tradipitant in the treatment of the stomach disorder gastroparesis.
The FDA detailed the reasons for its rejection in a Complete Response Letter (CRL). In a press release, Vanda responded: “The CRL was conclusory in nature, generally disregarded the evidence provided and instead suggested that Vanda conduct additional studies with a design and duration inconsistent with the advice of key experts in the field and not appropriate based on the scientific understanding and natural course of the disorder.”
The company also argued that the FDA delayed taking action by over 185 days, which is longer than the 180-day limit for the agency to either approve a submission or provide a chance for a hearing.
Not giving up
Vanda is attempting to develop tradipitant for two other indications besides gastroparesis: It’s also being tested for motion sickness and for atopic dermatitis, a skin disorder. Of the trio, the company has only submitted gastroparesis as an indication for FDA approval.
The biotech said that it will continue to pursue commercialization of the drug. It also pledged to continue support for an expanded-access program that provides the clinical-stage medication to a small group of gastroparesis patients.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
