What Scpharmaceuticals (SCPH) Investors Can Learn from the History


Did an iceberg just wallop into Scpharmaceuticals (NASDAQ:SCPH) stock? The biotech company’s shares are plunging at breakneck speed of almost 30%. Why? Unfortunately for investors, SCPH has received a letter from the FDA identifying deficiencies in its Furoscix NDA that preclude discussion of labeling and postmarketing requirements/ commitments at this time.

But what does it mean for investors? When the FDA identifies an issue (through initial review or through later submissions), the agency’s most frequent next decision is the rejection of the drug under review.

TherapeuticsMD is a great example, as the company issued almost the same press release back in April last year. Let’s take a look:

TherapeuticsMD Provides TX-004HR Regulatory Update

TherapeuticsMD, an innovative women’s healthcare company, today announced that, on April 7, 2017, the Company received a letter from the U.S. Food and Drug Administration (FDA) stating that, as part of the FDA’s ongoing review of the Company’s new drug application (NDA) for TX-004HR, the Company’s applicator-free vaginal estradiol softgel drug candidate for the treatment of moderate to severe dyspareunia (vaginal pain during sexual intercourse), a symptom of vulvar and vaginal atrophy (VVA), in post-menopausal women, the FDA has identified deficiencies that preclude discussion of labeling and postmarketing requirements/commitments at this time. The letter states that the notification does not reflect a final decision on the information under review.

The letter does not specify the deficiencies identified by the FDA and at this time the Company is not aware of the nature of the deficiencies. The Company intends to work with the FDA to understand the nature of the deficiencies and resolve them as quickly as possible.

What happened next, you ask? A month later, TherapeuticsMD announced that it has received a Complete Response Letter (CRL). The concern raised by the FDA was the lack of long-term endometrial safety data for TX-004HR.

Net net, TherapeuticsMD shares lost almost half of their value in one month. Time will tell whether this will be the case for Scpharmaceuticals.

 

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