No Relief for Sleepless Neurocrine Investors

Updated from Dec. 12, 6:24 p.m. EST

At 3 a.m. EST, if you'd woken up in the night and couldn't get back to sleep, you'd have discovered that the Food and Drug Administration didn't approve Neurocrine's(NBIX Quote) sleep aid-drug Indiplon. Rather, the agency deemed the drug approvable, again, on the condition that the company submit additional clinical and preclinical data.

The stock plummeted $4.45, or 42%, to $5.90, in recent premarket trading.

The company said the most recent approvable letter didn't raise any of the same issues as the one it received in May 2006, which requested additional data and analysis.

Specifically, the FDA now wants a clinical trial in the elderly, a safety study on the rates of adverse events that result from Indiplon compared to marketed products and a preclinical study on the drug during the third trimester of pregnancy.

Neurocrine will hold a conference call at 9 a.m. to discuss the news.

Neurocrine investors spent all day Wednesday waiting for an FDA decision on the immediate-release version of the drug, which is designed to quickly help a person fall back asleep once he or she wakes up in the middle of the night without a long-lasting effect.

Indiplon would compete with Sepracor's(SEPR Quote) Lunesta and Sanofi-Aventis'(SNY Quote) Ambien CR, among others. Ahead of the decision, analysts were cautiously optimistic for an approval but were also fixated on Neurocrine's second hurdle, a commercial partner for the drug.