Shares of Protalix BioTherapeutics (PLX 2.58%) are falling off a cliff on Wednesday after the company announced a disappointing regulatory update regarding one of its pipeline candidates, pegunigalsidase alfa (PRX-102). The biopharmaceutical company's stock was down by 38.4% as of 12:41 p.m. EDT, after dropping by as much as 43.2% earlier in the day.
Pegunigalsidase alfa is an experimental treatment for a rare genetic disorder called Fabry disease. Protalix BioTherapeutics is developing this therapy in collaboration with privately owned Chiesi Global Rare Diseases. Today, the two entities reported that they had received a complete response letter from the U.S. Food and Drug Administration (FDA) for their biologics license application for pegunigalsidase alfa as a treatment for Fabry disease in adult patients.
The FDA sends a complete response letter to communicate it has completed its review of a new or generic drug application, and it decided that it will not approve it for marketing in its present form.
It isn't clear why the FDA declined to approve this product; for all investors know, it could be due to potentially severe adverse reactions associated with it, manufacturing issues, or insufficient evidence of its efficacy. Whatever it is, Protalix BioTherapeutics vowed to continue pursuing this project.
CEO Dror Bashan said, "While disappointing, we remain confident in the strength of our data and in the depth of our program. We remain committed to the program and to working with the FDA and Chiesi toward the approval of PRX‑102."
Regulatory setbacks are always problematic for drugmakers, especially for a relatively small company with limited sources of revenue such as Protalix BioTherapeutics. Thus, it isn't surprising to see investors sell off shares of the healthcare company today. But Protalix BioTherapeutics is planning on giving an update regarding the next step in its attempt to earn FDA approval for pegunigalsidase alfa soon. Unless the company can outline a clear path toward regulatory approval, its shares will likely remain southbound.