Encysive shares sink on third approvable letter

The FDA issued a stinging rejection of Encysive's pulmonary arterial hypertension drug Thelin in its third approvable letter issued late Friday, saying that researchers had not demonstrated that the drug works as billed. Regulators say that Encysive did demonstrate that patients taking the drug were able to exercise more, but they want the company to mount a new clinical trial to provide additional data for the drug. Encysive immediately put the market on notice that the latest round with the FDA might require the company to restructure and lay off workers.

"We believe we adequately addressed the issue raised by the FDA in the second approvable letter and we are deeply disappointed in their decision," said CEO Bruce Given. That was cold comfort to shareholders, though, who shaved off more than half of the stock price in early trading today.

- see this release
- here's the AP report on Encysive

ALSO: Encysive's bad news had a silver lining for Actelion, which saw its stock rise as the threat of new competition for Tracleer receded. Report