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No Rest Yet for Neurocrine

Neurocrine Biosciences (NBIX) said Thursday it might need to conduct more clinical or pre-clinical trials on safety issues to secure approval of its insomnia drug Indiplon.

The company said a delay in getting U.S. regulatory approval probably will cause it to amend its financial guidance during its second-quarter Webcast, although Neurocrine provided no details.

The San Diego, Calif.-based company provided the update after markets had closed, saying it had prepared a response to questions that the Food and Drug Administration posed last month. On May 15, the agency granted conditional approval for a quick-release version of Indiplon, but the agency rejected an application for an extended-release version.

If the agency requires more clinical trials, Neurocrine would suffer a major setback -- and an expensive, time-consuming delay -- in its effort to compete with drugs such as Ambien CR from Sanofi-Aventis (SNY - Get Report) and Lunesta from Sepracor (SEPR).

Neurocrine has enlisted Pfizer (PFE - Get Report) as its marketing partner.

When Neurocrine reported the FDA's decision last month , the stock was crushed. The agency's decision surprised both company management and Wall Street analysts. At the time, Gary A. Lyons, the chief executive, said he believed the FDA action represented a "short-term setback."

But on Thursday, Neurocrine suggested there might be a longer delay. Neurocrine said it has requested a meeting with the FDA to "help the company determine plans in moving forward."

For the immediate-release version of Indiplon, Neurocrine said the FDA wanted it to reanalyze data from some pre-clinical and clinical studies. "The FDA also requested reexamination of the safety analysis for the elderly population," the company said. "The FDA may require additional clinical and/or pre-clinical safety data."

As for the extended-release version, Neurocrine said "additional clinical data will likely be required." The FDA asked the company to reanalyze certain safety and efficacy data. The FDA "also questioned the sufficiency of the company's objective sleep-maintenance clinical data" because most tests were conducted with dosage levels higher than what Neurocrine is seeking in its application, Neurocrine said.

In regular trading Thursday, Neurocrine's stock closed up $1.29, or 7.1%, at $19.37. But after hours, the stock fell 90 cents.

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