What happened

In response to management sharing a regulatory update with Wall Street, shares of DBV Technologies (DBVT 5.91%), a clinical-stage biotech focused on treating food allergies, plunged 68% as of 10:52 a.m. EST on Thursday.

So what

DBV shared an update on Wednesday afternoon related to the status of its pending FDA approval of its drug Viaskin Peanut, which is a hopeful treatment for peanut allergies in children ages 4 to 11.

DBV stated that it has decided to withdraw its Biologics License Application (BLA) in response to a recent correspondence that it held with the FDA. The agency informed DBV that the application submitted in October lacked some key details related to the manufacturing of the compound and some of its quality controls.

Importantly, the FDA did not state that it had any concerns related to the clinical performance of the drug. This leads the company to believe that a resubmission will be possible without the need for any additional clinical studies.

Management also stated that its ongoing clinical trials with Viaskin Peanut will continue as planned. 

Businessman with hand over face talking on phone.

Image source: Getty Images.

Here's the commentary that CEO Daniel Tasse shared with investors in response to the news:

We remain confident in the clinical profile of Viaskin Peanut and its potential to offer treatment to peanut-allergic children. Our plan is to address these concerns as quickly as possible and to work closely with the FDA to provide an updated and complete file.

Traders are thrashing the company's stock in response to the disappointing update.

Now what

Regulatory delays are never welcome news, especially for a clinical-stage biotech that is burning through capital. 

The only good news in today's update is that the FDA did not cite any concerns related to Viaskin Peanut's clinical performance. Since the drug already received Breakthrough Therapy and Fast Track designations for the treatment of peanut allergy, the odds of it ultimately winning the thumbs-up still look to be decent once DBV satisfies the FDA's manufacturing and quality-control questions. 

Still, this update is not good news, so bulls should proceed with caution.