Transcept (TSPT) just released a newsletter with disappointing news on Intermezzo. The release reads as follows:
Transcept Pharmaceuticals(TSPT) announced today that it expects to receive a Complete Response Letter from the U.S. Food and Drug Administration (FDA) regarding the resubmitted New Drug Application (NDA) for Intermezzo® (zolpidem tartrate sublingual tablet) on or before July 14, 2011, the PDUFA date assigned by the FDA for completion of the Intermezzo® NDA review. The FDA issues a Complete Response Letter to indicate that the review cycle for an NDA is complete and that the application is not ready for approval. The Intermezzo® NDA seeks approval to market Intermezzo® for use as needed for the treatment of insomnia when a middle of the night awakening is followed by difficulty returning to sleep.
This update from Transcept is based on a teleconference with the FDA held earlier today during which the FDA expressed continued concerns about the safety profile of Intermezzo® based on information in the resubmitted NDA. Until Transcept receives the anticipated Complete Response Letter, the company has limited information as to the full extent of FDA concerns. After the Complete Response Letter is received, Transcept will announce additional information on the content of the letter and the company's plans for the future regulatory development of Intermezzo®.
It is hard to make an interpretation based on this announcement as to how difficult it will be to answer the FDA's concerns. However, concerns about safety sound serious. If the FDA is not satisfied with safety based on the current database, I am not sure what Transcept can do to resolve the issue. There is no hard or fast rule, but a Complete Response Letter often takes a year or more to resolve if the FDA's questions can ne answered from the existing data bases If the FDA wants additional studies it will take longer. I would expect Transcept to decline to the $3 to $4 level on this very disappointing news.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.