Shares of Biodel Inc. slid Tuesday after the biotechnology company said approval of its potential diabetes treatment VIAject may be held up by problems at a contract manufacturing location.
THE SPARK: The Danbury, Conn., company said Albany Molecular Research Inc. has received a Food and Drug Administration warning letter regarding a Burlington, Mass., factory. The location may be subject to regulatory action that could include withholding new drug application approvals, Biodel said in a Securities and Exchange Commission filing.
Albany Molecular acquired the factory as part of a deal last June to buy Hyaluron Inc. Hyaluron is one of two contract manufacturers that make vials of the finished product included in Biodel's VIAject.
Biodel said that even if issues raised in the warning letter lead to a delay in VIAject's approval, the company doesn't believe the letter will have a long-term impact on marketing plans for the insulin.
THE BACKGROUND: VIAject is a type of human insulin designed to be absorbed into the blood faster than currently marketed rapid-acting insulin. Biodel said in March the FDA would review it and was expected to make a regulatory decision by Oct. 30.
The company said Tuesday it won't commercially launch VIAject until a disposable pen version is approved, and it will submit that for FDA review in early 2011. It also said it is working with another manufacturer, Wockhardt Ltd., to develop the pen and intends to do most of its future VIAject manufacturing with that company.
SHARE ACTION: Down 33 cents, or 7.7 percent, to $3.97 in Tuesday afternoon trading. By comparison, the Standard & Poor's 500 index was down 1 percent.