Pfizer Inc said it could not decide whether to pursue regulatory approval for Pain Therapeutics Inc's painkiller Remoxy, for which the United States Food and Drug Administration sought additional studies.
Shares of Pain Therapeutics fell 46 percent before the bell. Shares of Durect Corp, which provided the technology used in Remoxy, fell about 38 percent.
In a regulatory filing Pfizer -- which has marketing rights to the drug -- said that the FDA required additional clinical studies to be conducted for Remoxy, to address concerns raised in its June 2011 rejection letter.
Pfizer said its response to the FDA's latest rejection letter in June 2011 would not be submitted to the regulator before mid-2015.
Durect said Pfizer needs to conduct two studies, a study to show Remoxy is bioequivalent to its original formulation and an abuse potential study with the modified version of the drug.
Pfizer said it appeared there was a "regulatory pathway forward" for the drug, which it discussed with the U.S. Food and Drug Administration in a meeting on March 28.
However, Pfizer executive Alan Litwack said in a letter to Pain Therapeutics Chief Executive Remi Barbier that "no final decision has been made at this time" on whether to take Remoxy to commercial development.
The abuse-resistant painkiller has been rejected twice by the FDA due to concerns about its chemical make-up and production process.
The company's shares were down slightly before the bells.
Shares of Pain Therapeutics and Durect Corp rose more than 40 percent last week after Pfizer said it was in talks with the FDA to find a way forward for Remoxy.
Durect's technology was used to design Remoxy as a gel capsule so that it couldn't be abused by crushing it for snorting or dissolving it for injecting.
Pain Therapeutics and King Pharmaceuticals Inc first filed a marketing approval application for Remoxy in 2008. The FDA rejected it, and requested additional non-clinical data.
King, which was later acquired by Pfizer, resubmitted the application in December 2010. The FDA rejected the application in June 2011, saying that certain lots of Remoxy showed inconsistent release performance during testing.
(Reporting By Vrinda Manocha in Bangalore; Editing by Joyjeet Das)