BOSTON (MarketWatch) -- NeoPharm Inc. shares plunged on Thursday after the biotech group announced that the Food and Drug Administration has asked the company to conduct another extensive clinical trial for its brain cancer drug cintredekin besudotox before it will consider approving the drug.
Shares of NeoPharm were down 14% at $1.60 after hitting a 52-week low of $1.40 earlier in the day.
In a statement early Thursday, the Waukegan, Ill.-based biotech group said that the FDA wants it to run another Phase III clinical trial for cintredekin besudotox. NeoPharm has applied to have the drug approved to treat glioblastoma multiforme, a common but very deadly type of brain tumor.
"The company is disappointed with the [FDA's] Office of Oncology's position, which, if implemented, would significantly delay the introduction of this therapy to GBM patients," NeoPharm said, in a statement.
"The company will consider its options to determine the best path forward and will communicate its plans when they are completed and approved by the board of directors," it added.
In December 2006, NeoPharm informed investors that a key Phase III clinical trial called Precise for cintredekin besudotox had yielded mixed results.
On March 13 of this year, NeoPham said it planned to meet with FDA officials in late March to find out if the product could still be approved. NeoPharm added that there was no assurance that the product could be approved or that the FDA would not require additional clinical work.
Cintredekin besudotox, NeoPharm's lead product, is designed to attack cancerous brain tumor cells without harming healthy brain tissue. The company also is working on a drug delivery technology called NeoLipid.
Val Brickates Kennedy is a reporter for MarketWatch in Boston.