Impax Laboratories Inc said the U.S. Food and Drug Administration raised concerns about the company's factory in Taiwan, casting in doubt the future of its Parkinson's drug, rytary.
Shares of Impax, which makes generics and specialty drugs to treat central nervous system disorders, fell as much as 17 percent on Tuesday, after the regulator listed 10 violations at the plant.
Unsatisfactory manufacturing practices have become an Achilles' heel for Impax.
The FDA had rejected the company's patented long-acting capsule to treat the symptoms of Parkinson's disease in January last year, citing lingering manufacturing issues at Impax's Hayward plant in California.
After that rejection, the company cut its volumes at the Hayward factory and made its Taiwan plant the primary facility for rytary.
When it resubmitted a marketing application for rytary in April, Impax said that the FDA would inspect manufacturing facilities involved in the production of the drug.
The FDA's inspection of the Taiwanese factory exposed a number of violations, including invalidated equipment being used in the drug manufacturing process, as well as a failure to conduct a thorough review of failed batches and reject drug products that did not conform to specifications.
Analysts said rytary's approval would now likely be subject to further regulatory delays.
"We believe the occurrence of these issues at Taiwan (... supposedly where IPXL learned from its Hayward mistakes) does not have positive read through for IPXL's ability to close out its Hayward warning letter," Leerink Partners analyst Jason Gerberry said, anticipating a delay of at least 18 months.
Impax said on Tuesday that the FDA did not specify what impact its observations at the Taiwan plant would have on rytary's October 9 review date.
GlaxoSmithKline Plc and Impax terminated their 2010 collaboration to develop and market rytary outside the United States and Taiwan in April last year, about four months after the FDA rejection.
If approved, the drug could rake in peak annual U.S. sales of between $500 million to $1 billion, Guggenheim analysts said.
The company's shares, which have gained more than a third of their value in the past year, were down about 15 percent at $23.86 in afternoon trade on the Nasdaq.
Over 2.3 million shares had changed hands by 12.45 ET, more than four times the stock's 10-day moving average.
(Reporting by Natalie Grover in Bangalore; Editing by Saumyadeb Chakrabarty and Simon Jennings)