PTC Therapeutics Inc. (NASDAQ: PTCT) shares took a dive early on Monday after the company announced a key U.S. Food and Drug Administration (FDA) decision, and it wasn’t good. The question on everyone’s mind is whether this will be a huge roadblock for growth in the future.

As we have said time and time again, clinical trials and FDA decisions have the potential to make or break companies in this industry. For the month of October, a few of these companies have been on the move, and a few more are expecting results or decisions later this quarter.

According to the regulatory update, the FDA essentially denied the company’s first appeal of the refuse to file letter issued back in February for its New Drug Application (NDA) for Translarna in the treatment of Duchenne muscular dystrophy.

The company intends to escalate its appeal to the next supervisory level of the FDA. This is an iterative process and the company anticipates that multiple cycles of appeals to progressively higher levels of the FDA may be required.

It is worth noting that even though the U.S. FDA has denied the NDA for Translarna, the drug still has a marketing approval in Europe so not all is lost. Not to mention Translarna is still undergoing a few other clinical trials for different indications including nonsense mutation cystic fibrosis, among others.

Although PTC is not happy with this decision, its fairly active short-seller base was more than pleased. For the most recent settlement date, PTC had a total of 6.62 million shares short, which was up slightly from the previous level of 6.27 million. These short sellers make up about 20% of PTC’s total float.

Looking back at revenues for the past two years, the company posted $25.25 million in revenue for 2014 and $36.77 million in revenue for 2015. Looking ahead, Thomson Reuters has consensus estimates calling for revenues of $71.3 million, $96.5 million, $150.4 million and $232.3 million in the years 2016 to 2019, respectively. However in this time, PTC is still expected to report a loss out through 2019.

Shares of PTC were last seen down over 28% at $9.46, with a consensus analyst price target of $11.57 and a 52-week trading range of $5.27 to $35.74.

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