POINT RICHMOND, Calif. (AP) — Shares in Transcept Pharmaceuticals were nearly cut in half Wednesday after the company said it does not expect the Food and Drug Administration to approve its sleep drug Intermezzo.
The FDA is scheduled to make an official decision by Thursday, but late Tuesday, Transcept said it expects the agency to ask for more information related to safety. The company has asked the FDA to approve Intermezzo as a treatment for people who wake late and night and cannot get back to sleep.
It would be the second time the FDA has asked Transcept for more safety data about Intermezzo. In October 2009, the agency asked Transcept to run a highway driving study to provide more data about the drug's effects the following day. Transcept filed a new application in late 2010.
Transcept licensed Intermezzo to Purdue Pharma LP in August 2009. Purdue paid $25 million upfront and Transcept could get as much as $145 million in total if the drug is approved and reaches sales targets, in addition to royalties. Purdue has the right to market the drug in the U.S., Canada, and Mexico, and Transcept has an option to help promote it in the U.S.
The deal included about $30 million in payments that were related to the timing of Intermezzo's approval, meaning the new delay could reduce the value of the arrangement.
Shares of Transcept Pharmaceuticals Inc. dropped $3.45 to $5.14 in early trading.