FDA withholds final OK of Encysive lung drug

Last Updated: 2006-07-25 12:00:37 -0400 (Reuters Health)

LOS ANGELES (Reuters) - Encysive Pharmaceuticals Inc. on Monday said U.S. regulators withheld final approval of its treatment pulmonary arterial hypertension, a lung condition, pending resolution of an outstanding issue.

The company's shares plunged by more than a third following the announcement.

Encysive said it received a second approvable letter for the treatment known as Thelin from the U.S. Food and Drug Administration that said one issue raised in a March letter remains unresolved.

Houston-based Encysive said the FDA again offered the alternative of conducting additional clinical work and provided recommendations on the company's risk management plan.

The company also said the FDA acknowledged that the unresolved item is a matter of judgment and expressed an openness to consider new arguments to address the item.

Shares of Encysive, which fell 2 percent to close at $6.18 on Nasdaq, were down 34 percent at $4.10 in after hours trading.

Some analysts predict peak annual sales for Thelin of $200 million.

Pulmonary arterial hypertension, or PAH, causes severe shortness of breath and is often fatal.

If approved, Thelin will compete with Swiss biotechnology company Actelion's drug Tracleer and Pfizer Inc.'s Revatio, which contains the same active ingredient as Viagra.

A fourth PAH drug called ambrisentan is being developed by Myogen Inc.