What happened

Shares in Portola Pharmaceuticals (NASDAQ:PTLA) fell 11% on Thursday. This came after the company reported on Dec. 11 that European regulators are delaying a key decision on its next-generation manufacturing process, and ahead of a decision by the Food and Drug Administration on that same process later this month.

So what

Portola Pharmaceuticals has secured the FDA's OK for two distinct medications, but so far, sales of these drugs are falling far shy of the company's expenses. That's forcing the company to rethink its strategy.

A man holds his head while looking at a screen with a chart of a declining stock price

IMAGE SOURCE: GETTY IMAGES.

The company reported that sales of Bevyxxa, a factor Xa anticoagulant for use in patients at risk of blood clots following hospitalization, were a negative $552,000 in the third quarter because of product returns. And sales of Andexxa, an agent that reverses the anti-coagulant effects of factor Xa drugs, including the megablockbusters Eliquis and Xarelto, were only $7.7 million in its first full quarter on the market.

The anemic sales fell miles shy of the company's $83 million in third-quarter operating expenses, so the company is cutting spending in support of Bevyxxa to extend its cash runway. Instead it's doubling down on Andexxa, ahead of potential regulatory OKs in Europe and the U.S. for a next-generation manufacturing process that will allow it to sell to more hospitals.

Unfortunately, the possibility that regulators will approve that process slipped this week, following word that the European Medicines Agency's Committee for Medicinal Products for Human Use has requested more information and has delayed its decision until Feb. 28, 2019.

Portola Pharmaceuticals didn't offer up details on what questions remain unanswered, so investors are left guessing if the FDA could similarly push back its timetable for review. Currently, an FDA decision is anticipated on Dec. 31.

Now what

Portola Pharmaceuticals' C-suite has undergone a reboot since this summer because of Bevyxxa's anemic launch; even with cutting its spending on Bevyxxa, its cash stockpile is only anticipated to get the company into 2020. Any delay that pushes back a widespread rollout of Andexxa could increase the pressure on the company's balance sheet.

Having said that, Andexxa is the only therapy approved to reverse bleeding in emergency situations in factor Xa inhibitor patients; that suggests it could generate hundreds of millions of dollars in annual sales someday. The company is also developing a cancer drug, cerdulatinib, that may qualify for a speedy review. Management plans to sit down early next year with the FDA to discuss a pathway to market, for its use in peripheral T-cell lymphoma and cutaneous T-cell lymphoma.

Overall, this company has question marks. Bevyxxa's future is in doubt, and Andexxa's recent news makes buying ahead of an FDA go/no-go a risky bet. Therefore, all but the most risk-tolerant investors ought to sit on the sidelines until the FDA issues a decision.

Todd Campbell owns shares of Portola Pharmaceuticals. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.