What happened

Shares of BioMarin Pharmaceutical (NASDAQ:BMRN) are down 35% at 1:41 p.m. EDT because the U.S. Food and Drug Administration issued a complete response letter for the biotech's hemophilia A gene therapy, valoctocogene roxaparvovec (valrox).

So what

A complete response letter is the FDA's euphemism for a rejection letter. The review is complete, but the agency needs more information before it can approve the treatment.

In BioMarin's case, it seems the FDA moved the goalpost for approval.

Rejected stamp

Image source: Getty Images.

The agency had previously told BioMarin that it could file the marketing application with interim data from the phase 3 clinical trial that showed the treatment increased the activity of Factor VIII, the clotting factor that's missing in patients with hemophilia A. Valrox puts the Factor VIII gene into patients' cells, which allows their blood to clot after they're cut.

The FDA wanted to see long-term data as well, which BioMarin provided from patients enrolled in the phase 1/2 clinical trial since they were treated four years ago. Unfortunately, the FDA concluded that there were differences between the phase 1/2 study and the phase 3 study, which made it hard for the agency to mesh the long-term data from the phase 1/2 study and the larger-but-shorter phase 3 study.

Now what

Now the FDA wants two-year data from the phase 3 study showing valrox lowers the annualized bleeding rate, which won't be ready until November 2021. The biotech will then have to process the data and resubmit the marketing application, pushing a potential approval into 2022.

The delay is a major blow to BioMarin, which was counting on valrox to propel it forward. BioMarin sells multiple drugs for rare diseases, but valrox is its first legitimate chance to have a blockbuster treatment with more than $1 billion in sales.

Waiting two years for an approval also gives Pfizer and Sangamo Therapeutics a chance to catch up with their Factor VIII gene therapy candidate, giroctocogene fitelparvovec, which is scheduled to enter a phase 3 clinical trial shortly.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.