Shares in Catalyst Pharmaceuticals (NASDAQ:CPRX) crashed more than 40% after the firm, which is developing therapies for people with rare debilitating diseases, received a 'Refusal to File' letter from the US FDA.
Shares lost 40.59% on Nasdaq to stand at US$1.10 each.
It's in regard to its new drug application for Firdapse (amifampridine phosphate) - an investigational drug candidate for treating rare autoimmune, neuromuscular disorders Lambert Eaton myasthenic syndrome (LEMS) and congenital myasthenic syndromes (CMS).
The FDA says the application, which was submitted in December 2015, was not sufficiently complete, and requests additional information.
The biotech firm plans to request a meeting with the FDA to discuss the matter and hopefully reach an understanding as to what will be required for the Firdapse NDA to be filed by FDA for review.
"We expect to work closely with the FDA over the coming weeks in an effort to resolve the open issues and to define a path forward for a successful resubmission of our application at the earliest point in time," said Patrick McEnany, chairman and chief executive.
"We remain focused on delivering on our promise to transform the way people living with LEMS and CMS are provided access to a safe and effective, FDA approved therapy.
"Additionally, our Expanded Access Program continues to enroll new patients and provide Firdapse at no cost to patients who meet the enrollment criteria."
Catalyst has previously received orphan drug status for Firdapse to treat LEMS and CMS, and Breakthrough Therapy Designation for Firdapse to treat LEMS.