Ocular Therapeutix Inc. (NASDAQ: OCUL) shares were absolutely crushed on Wednesday after the firm received less than favorable news from the U.S. Food and Drug Administration (FDA). In effect, the agency sent Ocular Therapeutics a Complete Response Letter (CRL) regarding its resubmission of a New Drug Application (NDA) for Dextenza in the treatment of ocular pain following ophthalmic surgery.

The CRL stated that the FDA cannot approve the NDA in its present form.

Some of the sticking points were deficiencies in manufacturing processes and analytical testing related to manufacture of drug product for commercial production identified during a pre-NDA approval inspection in May 2017.

On July 10, 2017, Ocular Therapeutix submitted a response intended to close out all observations that were issued in the May inspection. The company also submitted details of a manufacturing equipment change in July as an amendment to the NDA resubmission and requested that this be considered a major amendment that would extend the target action date under the Prescription Drug User Fee Act (PDUFA).

Despite these amendments, the CRL still went through. Actually, the CRL acknowledged receipt of the NDA amendment from July and stated that the amendment was not reviewed prior to the FDA’s action of the CRL.

A satisfactory resolution of the manufacturing deficiencies will be required before the NDA is approved. On the bright side, the FDA’s letter did not identify any efficacy or safety concerns with respect to the clinical data for Dextenza provided in the NDA nor any need for additional clinical trials for the NDA approval.

Amar Sawhney, Ph.D., Ocular Therapeutix president, chief executive and board chair, commented:

We are evaluating the FDA’s response and plan to work closely with the agency in an effort to satisfy the requirements related to the NDA. Importantly, there were no clinical issues identified in the CRL pertaining to efficacy or safety related to the post-surgical pain indication. We believe that DEXTENZA can be approved once these open manufacturing items are resolved.

Shares of Ocular Therapeutix were down more than 25% at $5.65 early Wednesday, with a consensus analyst price target of $22.25 and a 52-week range of $4.04 to $11.91.

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