BOSTON ( TheStreet) -- A reminder that the next Biotech Stock Mailbag Live Chat is scheduled for Friday, July 15 at 12 p.m. ET.

I'll answer your questions and respond to your comments in what I hope will be an informative and fun discussion about the current state of the biotech investment sector. Please join me.

A looming FDA drug approval decision kicks off this week's Mailbag. Charlie W. asks, "What's your best prediction for Transcept Pharmaceuticals' (TSPT) coming up approval decision?"

I'm going with a rejection. FDA is expected to issue its decision on July 14.

Transcept is taking a second stab at FDA approval for a low-dose formulation of the popular generic sleeping drug zolpidem (commonly known as Ambien.) This Transcept sleeping pill, branded as Intermezzo, is intended for people who wake up in the middle of the night but cannot fall back asleep.

The FDA has never before approved a so-called "middle of the night" sleeping pill and rejected Intermezzo in October 2009, due to safety concerns. The FDA wanted more data on Intermezzo's next-day effects, particularly the risk of driving impairment. Regulators were also concerned about the ability of people to take Intermezzo with less than four hours of sleep remaining or taking more than one pill per night.

Transcept conducted a driving impairment study that showed Intermezzo to be safe for people who have at least four hours of sleep before waking. The company also redesigned the Intermezzo packaging and bolstered instructions to lower the risk of dosing errors.

What Transcept did not do, however, is conduct a study to demonstrate that patients who wake in the middle of the night are able to use Intermezzo safely and correctly.

Geoffrey Chambers, who writes the biotech blog, pointed out this week that Transcept and the FDA discussed the need for a "pre-approval patient use study." Transcept argued against running such a study, believing the new safety data included in the Intermezzo resubmission was sufficient to assuage the FDA's concerns.

According to Transcept disclosures in regulatory filings, FDA said it would "consider" the company's reasoning for not conducting a pre-approval patient use "in light of the overall resubmission of the Intermezzo NDA, including the data generated in the Intermezzo highway driving study."

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