Zogenix, Inc. (NASDAQ: ZGNX) is having an incredibly rough start to the trading session in the pre-market hours this morning, and for good reason. The comapny announced a rejection from the FDA, upsetting investors and sending the stock tumbling. Today, we’ll talk about:
- The rejection;
- what we’re seeing from ZGNX stock as a result; and
- what we’ll be watching for ahead.
ZGNX Tumbles After Announcing FDA Rejection
As mentioned above, Zogenix is having an incredibly rough start to the trading session this morning after announcing an FDA rejection. The announcement came by way of press release early this morning.
In the release, ZGNX said that it has received a Refusal to File letter from the FDA with regard to its recent new drug appliction. Through the application, the company was attempting to bring FINTEPLA to market as a potential treatment for seizures associated with Dravet syndrome.
In the release, ZGNX said that the FDA determined that the NDA was not sufficiently complete to permit a substantive review. The FDA cited two reasons for this response:
- Certain non-clinical studies were not submitted to allow assessment of the chronic administration of fenfluramine; and
- the application contained an incorrect version of a clinical data set, preventing the completion of the review process that is necessary to support the filing of an NDA.
Nonetheless, it’s worth mentioning that the FDA has not requested any additional clinical efficacy or safety studies. In a statement, Stephen J. Farr, Ph.D., President and CEO at ZGNX, had the following to offer:
We remain highly confident in FINTEPLA’s clinical profile demonstrated in the Phase 3 program in Dravet syndrome and are committed to advancing the product candidate as a potential new treatment option for this and other rare and often catastrophic epileptic encephalopathies. We are fully committed to working with the FDA as quickly as possible to address the open issues and clarify the path to successfully re-filing our application.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of ZGNX, the news proved to be incredibly negative. After all, an FDA rejection is a painful reality.
While the company may work to get the NDA accepted for review, mistakes at this step cause very painful delays. So, it’s not surprising to see that upset investors are sending the stock tumbling down.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:15), ZGNX is trading at $37.78 per share after a loss of $14.07 per share or 27.14% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ZGNX. In particular, we’re interested in following the story surrounding the company’s continued work to bring FINTEPLA to market. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!
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