What happened

Shares of Progenics Pharmaceuticals (NASDAQ:PGNX) are down 10.5% at 12:53 p.m. EDT Friday after announcing after the bell yesterday that the Food and Drug Administration will take an additional three months to review the marketing application for Azedra, a treatment for malignant, recurrent, and/or unresectable pheochromocytoma and paraganglioma, which are rare types of neuroendocrine tumors.

So what

Investors had been piling into Progenics' stock ahead of an FDA decision that was expected on or before the Prescription Drug User Fee Act (PDUFA) action date of April 30. But the guidelines laid out in PDUFA allow the FDA to extend its goal date by three months when a company submits extensive additional data during the review.

In this case, Progenics noted that the data was for the chemistry, manufacturing, and controls section of the marketing application and isn't related to the safety of efficacy of Azedra. While that should give investors some confidence in an eventual approval, Progenics didn't give any further details, making it hard to know the extent of the FDA's questions and whether Progenics has satisfied the agency.

A medical professional in a white coat holding a clipboard and talking to a person.

Image source: Getty Images.

Now what

If Azedra ends up getting approved, a three month delay isn't worthy of a 10% decline in the stock price, especially since the delay could actually be shorter because the PDUFA date is just a goal the agency is trying to meet.

Investors are likely selling today because they're worried that the delay is a sign of a bigger issue that Progenics can't fix easily, although arguably a huge problem would have just resulted in an FDA rejection rather than the agency allowing the company to submit additional data to answer its questions. The other possibility is the stock is down as impatient traders who were looking to hold over the binary event are selling their shares and moving on.

Long-term investors willing to assume the extra unknown risk associated with potential manufacturing problems can pick up shares of Progenics on sale today, but without more information, it's hard to know exactly how risky a venture that is.

Brian Orelli and The Motley Fool have no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.