The US health regulator on Thursday declined to approve a treatment from Y-mAbs Therapeutics for a rare form of nerve cancer in pediatric patients, dragging the company's shares down 16% in extended trading.
Y-mAbs said it is assessing the implications of the Food and Drug Administration's complete response letter (CRL) and the company's plans for the drug's development program.
The FDA's decision follows a unanimous vote by its advisers in October against the drug, omburtamab, to treat neuroblastoma due to insufficient evidence that it improves overall survival.
"We are disappointed but not surprised based on the outcome of the (FDA advisory panel) meeting," interim Chief Executive Officer Thomas Gad said in a statement.
The FDA and its advisers had raised issues over the strength of the data and uncertainty over trial results.
The company already has a neuroblastoma drug Danyelza, approved in 2020, which generated $32.8 million in revenue in the first nine months of 2022.
Omburtamab was being developed to treat cancer in the cerebrospinal fluid that provides nutrients and chemicals to the brain and spinal cord.
Danyelza, on the other hand, is approved for the treatment of relapsed or refractory neuroblastoma in the bone or bone marrow.