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What: Shares of pharmaceutical company Impax Laboratories (NASDAQ:IPXL) dropped as much as 10% after the Food and Drug Administration sent the company a complete response letter, or CRL, for its idiopathic Parkinson's disease drug, Rytary.
So what: The CRL from the FDA was issued with regard to the supportive manufacturing and distribution aspect of Rytary, and it requested a re-inspection of the company's Hayward manufacturing facility. Impax, however, had removed Hayward from its list of supportive manufacturing facilities prior to its new drug application submission due to a warning letter from the FDA regarding manufacturing at the facility in 2011.
Now what: Impax's management is basically shrugging its shoulders at the moment because I don't think it has the slightest clue what the FDA is looking at with regard to Rytary's manufacturing process. It's going to take some very close hand-in-hand cooperation from both sides to resolve this, meaning it could be quite a while before Rytary gets resubmitted. Rytary's efficacy and safety don't seem to be the question here, so we're talking about a drug whose eventual approval appears very likely. This is one of the primary reasons Impax isn't tanking, and a reason why GlaxoSmithKline (NYSE:GSK), the owner of Rytary's rights outside the U.S., is hardly budging, either. But, it's still going to be about another six months to a year out before we get a verdict.
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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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