Healthcare

Outlook Therapeutics Stock Plummets 54% on FDA Rejection

Regulator denies approval for the company's wet AMD drug Lytenava for a second time, citing a lack of substantial evidence.

Shares of Outlook Therapeutics collapsed by more than 54% in heavy trading after the U.S. Food and Drug Administration (FDA) rejected its lead drug candidate for the second time. The stock plunged after the company announced it had received another Complete Response Letter (CRL) for its Biologics License Application (BLA) for Lytenava (ONS-5010), an ophthalmic formulation of bevacizumab intended to treat wet age-related macular degeneration (wet AMD).

The FDA's rejection centers on a "lack of substantial evidence of effectiveness," according to the company. The agency specifically noted that a recent confirmatory Phase 3 trial, known as NORSE EIGHT, failed to meet its primary efficacy endpoint. This outcome overshadowed a previous successful trial, NORSE TWO, which did meet its primary endpoint, leaving the company's U.S. approval pathway in jeopardy.

"While we are very disappointed with this outcome, we intend to meet with the FDA to receive additional clarity on their requirements," said Bob Jahr, Chief Executive Officer of Outlook Therapeutics, in a statement. Jahr emphasized that the CRL did not identify any other deficiencies in the application, suggesting the path forward depends on addressing this single issue.

The regulatory setback in the United States stands in stark contrast to the drug's success in Europe. Lytenava received marketing authorization from the European Commission and the UK's regulatory agency earlier this year and became commercially available in Germany and the UK in June. It is the first and only authorized ophthalmic version of bevacizumab for wet AMD in those markets.

For now, Outlook Therapeutics faces an uncertain timeline for U.S. approval, which may require a new and costly clinical trial to generate the confirmatory data the FDA requires. In the interim, the company plans to focus on cash conservation and expanding its commercial footprint across Europe while it determines the next steps to address the FDA's concerns.