The FDA has issued a "nonapprovable" letter for Connetics' experimental acne treatment, Velac Gel, sending the company's stock into a swoon in premarket trading. The Palo Alto, California-based biotech said that the only indication of why the treatment was rejected was a reference to a carcinogenic indication that appeared in a mouse study. The news sliced $7 million to $13 million off the company's projected earnings for 2005.
"We remain committed to bringing Velac to market, and will be working with FDA representatives to determine what is required to do so," said the company in a statement. "Despite this setback, Connetics will continue to expand its leading position in the dermatology field with four brands on the market and a robust and diverse pipeline."
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