Australian biotech company Pharmaxis' quest for profit has been delayed again, after its bid to market the cystic fibrosis drug Bronchitol in the US was rejected by that country's main regulatory body.
The US Food and Drug Administration said in a letter to Pharmaxis on Tuesday it could not yet approve Bronchitol, and recommended an additional trial.
"The submitted data do not provide a favourable benefit-risk balance to support the use of inhaled mannitol in patients with cystic fibrosis six years of age and older," the FDA wrote.
Pharmaxis chief executive Gary Phillips, who replaced long-standing CEO Alan Robertson last week, said the drugmaker was "clearly disappointed" and would be taking part in a follow-up meeting with the FDA.
"The company remains committed to bringing Bronchitol to [cystic fibrosis] patients in the US and the onus is now on Pharmaxis to work with the FDA to ensure Bronchitol is approved as soon as possible," Mr Phillips said in a statement to the ASX.
Shares in Pharmaxis closed 7.1 per cent down at 46¢ on Tuesday.
Mr Phillips' appointment to the top job in a management shake-up had reflected a shift by Pharmaxis from development towards the commercialisation of its drugs, and followed a series of setbacks.
In January, a critical review of Bronchitol by advisers to the FDA resulted in its shares falling more than 45 per cent in one day.
Analysts pointed to the coming results of Pharmaxis' Phase III trial of Bronchitol in patients with bronchiectasis - completed early this month - as key to its outlook.
"They don't need another slip-up," RBS Morgans healthcare and biotechnology analyst Scott Power said. "There is a fair bit weighing on the Phase III results."
Shaw Stockbroking analyst Darren Vincent said bronchiectasis had more sufferers than cystic fibrosis, and a successful trial could result in Pharmaxis obtaining label extensions for the marketing of the drug in Europe and Australia.
"While what's happened with the FDA represents a lot of disappointment and the share price has been caned for it, it's not game over by any sense," Mr Vincent said.
"In fact, the largest addressable markets are still before Pharmaxis. The key thing is that [the FDA decision] pushes out further again the realisation of any significant sales. And the market's just consistently been disappointed by Pharmaxis."
He said a $US40 million ($38.5 million) financing agreement Pharmaxis signed with NovaQuest Pharma Opportunities Fund III in January was expected to cover the costs of an extra Bronchitol trial.