* Gets FDA’s complete response letter
* FDA asks company to conduct two new late-stage trials * Seeks data on stability and manufacturing of drug
* Shares fall as much as 55 pct (Rewrites, adds analyst comment, updates stock movement)
By Krishnakali Sengupta
BANGALORE, Nov 1 (Reuters) - U.S. health regulators asked Biodel Inc BIOD.O to conduct two new late-stage trials to win approval for its experimental diabetes drug, requiring the company to raise substantial funding and knocking off half its market value on Monday.
The company’s shares fell as much as 55 percent to a 52-week low after the drug, Linjeta, was denied immediate approval.
The Danbury, Connecticut-based company said the U.S. Food and Drug Administration issued a complete response letter, asking it to conduct separate trials to establish efficacy in patients with type 1 and type 2 diabetes.
JMP Securities analyst Jason Butler said the new trial for type 1 diabetes was not a complete surprise given anomalies in the data, but the additional trial for type 2 diabetes was rather unexpected.
Linjeta is the second diabetes drug to fail to get regulatory nod in two weeks, following the failure of Amylin Pharmaceuticals’ AMLN.O high profile Bydureon, suggesting increased FDA scrutiny over diabetic treatments. [ID:nN20190180]
Butler expects each trial to cost the company about $15 million to $20 million, with a treatment duration of six months.
At June 30, the company had cash, cash equivalents and marketable securities of 23.9 million.
The analyst expects it would take the company about 18-24 months to complete the trials and resubmit the drug for approval.
“We expect further clarity to be apparent once the company meets with the FDA, possibly still in 2010,” Butler added.
The FDA also requested additional data related to stability and manufacturing of the drug, formerly called VIAject.
In August, Biodel had indicated the drug could be withheld after a regulatory warning letter to a manufacturing facility that produced vials of the drug. [ID:nSGE67N0HT]
The company said the FDA has specified the resolution of manufacturing issues as a requisite for approval.
The company’s shares, which have lost about 11 percent after the FDA warning in August, were down 44 percent at $2.03 in midday trade Monday on Nasdaq. (Reporting by Krishnakali Sengupta in Bangalore; Editing by Unnikrishnan Nair and Vinu Pilakkott)