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By Ransdell Pierson
NEW YORK Dec 13 Shares of Neurocrine Biosciences Inc (NBIX.O) lost almost half their value on Thursday after U.S. regulators said they could not approve the company's insomnia treatment until it undergoes several new clinical trials.
The latest setback for the experimental insomnia drug, called indiplon, drove Neurocrine shares down 46 percent to $5.50 in premarket trading.
The drug is the lead product for the tiny San Diego-based biotechnology company, which lost $27 million in the third quarter and is attempting to sell and then lease back its corporate headquarters in order to raise $108 million.
Indiplon had been deemed a potential big-seller until May 2006, when the U.S. Food and Drug Administration requested that Neurocrine further explain safety analyses and data from preclinical and clinical trials.
Amid the FDA's concerns and its demands for new information, Pfizer Inc (PFE.N) the following month pulled out of its collaboration with Neurocrine and returned to the tiny biotechnology company full rights to indiplon.
Neurocrine resubmitted its marketing application for the drug to the FDA last June, along with analyses that had been requested by regulators. It received new demands from the agency on Wednesday.
The FDA is now asking for a clinical trial of the drug in the elderly, a safety study that would pit indiplon against a marketed product, and a preclinical study to evaluate how the drug affects women in the third trimester of pregnancy, Neurocrine said in a statement early on Thursday.
The required studies could pose significant new delays in approval of indiplon, even as rival drugmakers such as Swiss biotech Actelion ATLN.VX and Paris-based Sanofi-Aventis (SASY.PA) move their experimental insomnia pills into or farther along final stages of testing.
"While we are disappointed in the FDA action, we will accept the FDA's offer to discuss the applications via a meeting or telephone conference in order to clarify and determine the next steps required," Neurocrine President and Chief Executive Gary Lyons said. (Reporting by Ransdell Pierson; editing by John Wallace)