The U.S. health regulator on Tuesday declined to approve Provention Bio Inc’s experimental diabetes drug, citing insufficient data, sending the company’s shares down about 28 percent.
The Food and Drug Administration (FDA) said a study in healthy volunteers failed to show that the drug is comparable to its older version used in the clinical trials.
The company said data from an ongoing late-stage trial, which is expected later in its third quarter, could address the agency’s concerns. The drug is being developed to delay type 1 diabetes, which affects 1.6 million Americans.
In the “best-case” scenario, the drug’s arrival in the market could be delayed by a year, said SMBC Nikko Securities America analyst David Hoang.
But if the strategy does not work, the company would have to redo its original phase 3 trial, which would be a multi-year process, Hoang said.
Provention acquired rights to teplizumab from MacroGenics Inc in 2018. The drug was earlier being developed by Eli Lilly to treat recent-onset of type 1 diabetes, but was not successful in its late-stage clinical trial.
The FDA also cited deficiencies related to a recent inspection at a manufacturing plant used by Provention Bio, but did not cite any issues with data related to efficacy and safety.
By Amruta Khandekar