Neurocrine's FDA Nightmare

Updated from 10:13 A.M. EDT

The Food and Drug Administration delivered a crushing blow to Neurocrine Biosciences(NBIX Quote) Tuesday, delaying final approval of one version of insomnia drug Indiplon and rejecting another version.

The FDA's ruling came as a surprise to Wall Street. Analysts had expected at least one version to get the agency's OK and provide stiff competition in a growing field. By early afternoon, Neurocrine shares had plunged 59% on 40 times its daily average trading volume.

"While we are disappointed in the FDA action, we will move forward expeditiously to address FDA's outstanding questions regarding the applications," said CEO Gary A. Lyons. ...