FDA finds mystery 'deficiencies' with Neos' long-acting Ritalin on the eve of approval

Neos CEO Vipin Garg

Neos Therapeutics ($NEOS) got an ominous note from the FDA just weeks ahead of the expected approval date for its long-acting ADHD treatment, clouding the future of the company's lead asset.

The drug, Cotempla XR-ODT, is an extended-release formulation of the active ingredient in Ritalin and other ADHD treatments, and it's slated for a final FDA decision by Nov. 9.

On Friday, Neos got word from regulators that, while reviewing Cotempla, the FDA "identified deficiencies that preclude discussion" of the drug's future label, the company said. The agency said the problem does not reflect its final opinion on Cotempla, according to Neos, but that's all the company knows about the issue, management said.

"Although the FDA has not provided us with any information regarding the nature of the deficiencies, we intend to work closely with the FDA to understand the nature of any such deficiencies once identified to us and resolve them as quickly as possible," Neos CEO Vipin Garg said in a statement.

Investors read the note as a troubling sign for Neos and its most-advanced drug, sending the company's shares down as much as 25% after hours on Tuesday.

Neos executed a $72 million IPO over the summer based in part on the potential of Cotempla, a formulation of methylphenidate designed to last for 12 hours. In filings with the SEC, Neos disclosed that the FDA inspected its production facility in May and cited it for a single instance of inadequate controls related to its computer systems. Neos said it responded to the agency in June and has corrected its system "to assure that changes in records are instituted only by authorized personnel."

Behind Cotempla, Neos' pipeline includes an extended-release formation of amphetamine, which is up for a final FDA decision in January.

- read the statement