Transcept shares battered after FDA denies Intermezzo OK

The FDA handed Transcept Pharmaceuticals some bitter news, denying approval of its sleep drug Intermezzo and asking for the kind of data that may require one or more new safety studies. Investors were quick to bail, sending Transcept's shares down by 46 percent this morning as analysts totted up the prospective costs of a serious delay.

Transcept ran into regulatory trouble trying to get an approval for a sleep drug that could be used when a person wakes up in the middle of the night and can't get back to bed. Regulators want to see more hard data on the effect Intermezzo (zolpidem tartrate sublingual tablet) has on people when they take it in the middle of the night--in particular whether it could interfere with their ability to drive the next day. The FDA has also asked Transcept "to address methods to avoid inadvertent dosing with less than four hours of bedtime remaining, and inadvertent re-dosing in a single night."

The delay at the FDA could prove extremely costly to Transcept. Purdue Pharmaceuticals licensed the drug with a $25 million upfront payment, but left development in Transcept's hands. If an approval is delayed beyond the middle of next year, the $30 million approval milestone will be cut by $2 million per month of delay.

"Transcept is committed to making this important new potential therapy available to insomnia patients. We will continue to work closely with the FDA to address their questions and define the path forward for Intermezzo," said CEO Glenn A. Oclassen."

- here's Transcept's release
- read the Reuters report