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NEW YORK, NY (
Delcath Systems(DCTH - Get Report) fell sharply Tuesday after U.S. regulators refused to accept an approval filing for the company's liver tumor treatment device.
The setback for Delcath translates into a lengthy regulatory delay for the company's chemosaturation system. Delcath filed for approval with the U.S. Food and Drug Administration in December, hoping for a quick six-month review and June approval.
Now, Delcath says the best-case outcome will be a resubmission of the approval filing in September. If FDA accepts the review this time, the chemosaturation system won't be up for an approval decision until March 2012 at the earliest.
Delcath shares dropped 29% to $8 in early Tuesday trading. Delcath shares had been on roll -- up 28% since Jan. 24 and 13% since the beginning of the year -- as biotech catalyst traders and other Delcath supporters bid up the stock anticipating a favorable FDA acceptance of the chemosaturation system approval application.
Delcath closed 2010 with $47 million in cash and is burning between $6 million and $7 million per quarter -- an amount the company said will rise in 2011.
The chemosaturation system is a device that isolates the liver from the body's blood supply, allowing doctors to flood the organ with high doses of the chemotherapy drug melphalan. Delcath is seeking approval for the system as a treatment for skin cancer patients who have tumors that spread to the liver.
FDA issued a "refuse to file" letter for the chemosaturation system, Delcath said, in a statement.
"The FDA's letter requested information involving manufacturing plant inspection timing, product and sterilization validations and additional safety information that we already planned on filing with our 120 day safety update in April, as well as additional statistical analysis clarification," said Delcath CEO Eamonn Hobbs, in a statement.
Delcath provided no other details on the FDA's requests.
--Written by Adam Feuerstein in Boston.
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