Shares of Fortress Biotech (NASDAQ:FBIO), a biopharmaceutical company, were down by 22.5% as of 12:26 p.m. EDT on Monday, after dropping by as much as 28.3% earlier in the day. These losses are a result of Avenue Therapeutics (NASDAQ:ATXI), a majority-owned subsidiary of Fortress Biotech, receiving a Complete Letter Response from the Food and Drug Administration rejecting its New Drug Application (NDA) for IV Tramadol. Shares of Avenue Therapeutics are down by more than 55% as of this writing.
In December 2019, Avenue Therapeutics submitted an NDA for IV Tramadol for the management of acute pain in patients who require an opioid. The FDA had no complaints regarding the efficacy of the medicine. But the agency argued that IV Tramadol "is not safe for the intended population," hence the Complete Letter Response rejecting the drug's application. A rejection at this time does not mean the drug has no chance of ever reaching the market.
The FDA requires additional data for the process to move forward, and Avenue Therapeutics has not given up on this project. "We will request a meeting with the FDA as soon as possible and are committed to working closely with the agency to resolve these issues in order to bring this important medicine to patients and clinicians in the U.S," said CEO Lucy Lu.
Avenue Therapeutics currently has no products on the market, and it does not generate any revenue. No doubt the biotech company and its shareholders were looking forward to the commercialization of IV Tramadol, which, considering recent developments, won't happen for at least a few months, if at all. Given these factors, it isn't surprising that investors are selling off shares of Avenue Therapeutics and those of its majority owner, Fortress Biotech.