U.S. health regulators denied approval to A.P. Pharma Inc's drug for treating chemotherapy-induced nausea and vomiting (CINV), and asked for additional analysis of late-stage data on the drug.
The company's shares fell 12 percent in premarket trading.
In a complete response letter to the company, the U.S. Food and Drug Administration also asked for a study that can test the usability of the drug's syringe system and pointed out certain deficiencies identified during inspections of its manufacturing facility.
The FDA asked the additional analysis of the late-stage trial data to reclassify patients into those receiving moderately vomit-inducing chemotherapy and highly vomit-inducing chemotherapy.
The agency earlier rejected the approval of the drug, APF530, in March 2010, citing concerns about its two-syringe administration system and deficiencies in the company's contract manufacturing facilities.
A.P. Pharma resubmitted its application in September last year after switching to a single-syringe system and conducting additional metabolism studies as required by the FDA.
"While disappointed in today's notification, we believe that the issues raised in the complete response letter are addressable, and we remain firmly committed to the successful development of APF530," CEO John Whelan said in a statement.
The company, which had planned to launch the drug in the second half of 2013, now expects to launch it in the first half of 2014.
AP's drug is delivered using a system that is designed to release the medication over a four- to five-day period.
The drug contains granisetron, a widely available generic, also sold as Kytril by Swiss drugmaker Roche, to treat CINV.
GlaxoSmithKline's Zofran and Japanese drugmaker Eisai Co Ltd's Aloxi, given in a single intravenous dose, are the other drugs used to treat both acute and delayed onsets of CINV.
Nausea and vomiting are the major reasons why many cancer patients prematurely discontinue chemotherapy treatment.
AP shares were down at 51 cents in premarket trading. They closed at 58 cents in over-the-counter trading on Wednesday.
(Reporting by Esha Dey in Bangalore, Additional reporting by Vrinda Manocha and Zeba Siddiqui; Editing by Maju Samuel)