What happened?

Shares of DBV Technologies (DBVT) were down a whopping 41.6% as of 11:41 a.m. EDT on Tuesday. The catalyst for this sell-off was the company's announcement that it has received a complete response letter from the Food and Drug Administration regarding its Biologics License Application (BLA) for Viaskin, a potential treatment for peanut allergy.  

So what

Viaskin is a patch designed to desensitize a patient's immune system by exposing the patient to increased amounts of peanut protein. But the FDA has questioned the effect of patch adhesion on the efficacy of Viaskin, and the agency requested additional data to clear up this issue. DBV Technologies complied with this request, but it seems it wasn't enough to please the FDA. This morning, the France-based biotech reported that the FDA would not approve Viaskin's BLA "in its present form." 

Man holding his head in panic.

Image source: Getty Images.

If DBV Technologies hopes to launch Viaskin on the market, it will have to make some modifications to its patch, do some more testing with this modified version of Viaskin, and submit clinical data to the FDA. At this point, no one knows how long this will take. The company will meet with the FDA to discuss the next steps in this process.

Daniel Tassé, CEO of DBV Technologies, said, "We are very disappointed in the FDA's response, but continue to believe in the potential of Viaskin Peanut."

Now what 

DBV doesn't have any products on the market at the moment, which means the company had a lot riding on its BLA for Viaskin, especially considering the high prevalence of peanut allergy both in the U.S. and abroad. Given this factor, it isn't surprising that investors sold off shares of the biotech stock following today's news. And considering the uncertainty surrounding Viaskin, it may not be wise to buy shares of DBV Technologies right now.