Pain for NuPathe stock as migraine patch rejected

BANGALORE (Reuters) - NuPathe Inc's (PATH.O) experimental migraine patch -- Zelrix -- was rejected by U.S. health regulators on Tuesday, sending its shares down to a life-low and pushing back the launch of its key product by at least 6 months.

The Conshohocken, Pennsylvania-based company's stock tumbled 49 percent to $1.89 on Tuesday morning making it the biggest loser on Nasdaq, as investors worried about the treatment's future and costs associated with additional trials.

The company, which was planning to launch the patch in the first half of 2012, said the U.S. Food & Drug Administration raised questions on the patch's chemistry, manufacturing and safety in a complete response letter.

"My estimate is that this will delay the approval for Zelrix probably by 6 months," Wedbush Securities analyst Liana Moussatos told Reuters.

NuPathe, which focuses on diseases of the central nervous system, including schizophrenia and Parkinson's disease, said it may have to conduct additional early-stage and/or non-clinical studies to answer some of the questions raised by the FDA.

"It maybe a pre-clinical or a toxicology study that the FDA wants done or has a question about, but not a long study that would require lots of patients to fulfill a safety database," analyst Moussatos said.

She added that the FDA's acknowledgement of the patch's efficacy suggests the company would not have to conduct a late-stage trial.

Zelrix is a single-use patch that quickly delivers GlaxoSmithKline's (GSK.L) sumatriptan, which is also available generically, through the patient's skin using an electric current.

In 2008, Johnson & Johnson (JNJ.N) recalled its pain patch Ionsys, which used the same technology as Zelrix, from European markets, after a potential risk of drug overdose.

Moussatos said NuPathe's patch is being designed to target a niche population that suffers from migraine side effects of nausea and vomiting and have a hard time swallowing a pill.

"I don't see it taking a huge market share because it is a patch, but all the doctors that I talked to at the American Headache Society meeting said about 5 percent of their patients like patches and prefer them," Moussatos said, estimating peak sales of $300 million.

GlaxoSmithKline's Imitrex, Merck's (MRK.N) Maxalt, AstraZeneca's (AZN.L) Zomig and Pfizer's (PFE.N) Relpax are among leading medicines currently on the market for migraine.

NuPathe said it has, or shortly will have, sufficient data to address the issues. It had submitted a new drug application for Zelrix in October 2010.

The company, which has a market cap of $53.64 million, will also request a meeting with the FDA to discuss the letter and its approach to resolve the issues.

Analyst Moussatos said the company is likely to meet the FDA in 30-45 days.

Migraine is a neurological disorder that affects about 30 million adults in the United States, NuPathe said.

(Reporting by Esha Dey and Kavyanjali Kaushik in Bangalore; Additional reporting by Anna Yukhananov; Editing by Roshni Menon)