Eagle Pharmaceuticals Inc said on Wednesday the U.S. Food and Drug Administration (FDA) declined to approve its drug Ryanodex to treat heat stroke and requested an additional clinical trial, sending its shares down 20 percent.
The drug, which is approved for the treatment and prevention of malignant hyperthermia, is being tested to treat exertional heat stroke (EHS), in conjunction with external cooling methods.
Ryanodex brought in $4.4 million in sales in the first quarter ended March 31.
EHS is a life-threatening, heat-related illness that occurs during physical activity and is characterized by hypotension, hyperventilation and extremely high body temperature.
Eagle is reviewing its options and intends to evaluate the FDA’s response to proceed with the drug’s development, Chief Executive Scott Tarriff said.
The FDA’s request for another trial came as a surprise for Mizuho Securities USA analyst Irina Koffler, who called it the “worst case scenario” given the rarity of EHS and the challenges associated with a trial.
“We don’t know if this program will ever make it to the market,” Koffler, who rates Eagle “underperform”, wrote in a note.
The New Jersey-based company’s shares fell as much as 25.5 percent to $52.215 in afternoon trading on the Nasdaq.
The stock had declined 11.7 percent this year, as of its last close.
(Corrects to Wednesday in paragraph 1.)
(Reporting by Tamara Mathias in Bengaluru; Editing by Amrutha Gayathri)