Shares of Provention Bio (NASDAQ:PRVB), a clinical-stage biopharmaceutical company, were beaten down 25.2% as of 12:40 p.m. EDT on Tuesday. Investors are responding to a Complete Response Letter that the company received from the Food and Drug Administration instead of an approval decision.
Provention Bio's lead candidate, teplizumab, is an experimental antibody meant to delay the onset of type 1 diabetes for at-risk patients. In a majority of patients given a 14-day course in the pivotal TN-10 study, the onset of insulin-dependent diabetes was delayed by more than two years.
Instead of the approval investors were hoping for, the FDA sent Provention Bio a Complete Response Letter. The main issue, according to the company, involves an incomplete comparability study. In a nutshell, the FDA doesn't think the company has proved that commercial teplizumab behaves exactly the same way as teplizumab used in clinical trials.
While the delay is disappointing, it could have been much worse. Provention Bio said the issues brought up earlier this year by an FDA advisory committee weren't to blame. In May, independent experts expressed concerns regarding a small pivotal trial size and a lack of follow-up data for teplizumab.
Provention Bio expects relevant compatibility data from an ongoing phase 3 trial with newly diagnosed diabetes patients before the end of September. The company also said there was an issue at the fill and finish plant that needs to be addressed.
Since the FDA cited problems that can be addressed without running another long clinical trial, there's a good chance that this biotech stock can bounce back from today's beating.