Shares of Innocoll tumbled into penny stock territory Thursday evening after the biotech reported that the FDA had spurned its application for a new pain therapy called Xaracoll.
Innocoll reported that the FDA had returned a “refuse-to-file” letter for their application, saying it would need to be revised for a drug/device combination before regulators could consider a marketing approval.
Innocoll’s stock $INNL plunged about 50% on the RTF report, which leaves the company in a tough spot. The biotech had a little more than $30 million in cash on hand at the end of the third quarter after burning through $53 million in the first 9 months of the year. Now it will have to turn to investors after an embarrassing about-face; its second in two months.
Early last month the Athlone, Ireland-based company reported that its two Phase III studies for diabetic foot ulcers had failed, putting the future of another one of its products in doubt. And in this environment, investors can be unforgiving when a small biotech blunders badly.
The biotech has developed a collagen mix it believes can deliver therapies more effectively to the site where they are needed.
“We expect to work with the FDA over the coming weeks in an effort to address the open issues and to define a path forward for a successful re-filing of our application at the earliest point in time,” said Tony Zook, CEO of Innocoll.
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