Intra-Cellular Therapies Inc. (NASDAQ: ITCI) saw its stock crumble early on Monday after the company provided an update on its plan to submit a New Drug Application (NDA) for ITI-007 (lumateperone) for the treatment of schizophrenia. Although the U.S. Food and Drug Administration (FDA) said that results from the recent ITI-007 studies do not preclude the company from conducting its NDA, there still might be some lingering issues.

The agency brought up certain findings in nonclinical animal toxicology studies of lumateperone and has requested additional information that this might not pose a risk in humans. However, these findings only occurred in one of the nonclinical toxicology species and only after high exposure to drug-related material.

Ultimately, Intra-Cellular believes that these findings are not indicative of a safety risk for humans due to species differences in the metabolism of lumateperone. Essentially, lumateperone and its metabolites are rapidly eliminated from the body in humans and there is no retention of drug; while in the animal species in question, a substantial amount of drug-related metabolites are retained for an extended period and metabolites are formed in this species that have not been detected in humans.

The firm was very quick to point out that the FDA has not raised any safety concerns regarding the study of lumateperone in short-term treatment trials in humans, including completed schizophrenia clinical trials and the ongoing Phase 3 clinical trials in bipolar depression and agitation associated with dementia, including Alzheimer’s disease. Over 1,500 people have been exposed to lumateperone to date, and the drug has been well-tolerated with a safety profile similar to placebo.

Finally, Intra-Cellular intends to submit an NDA for lumateperone for the treatment of schizophrenia by mid-year 2018. If the FDA considers these responses insufficient, the agency may place a long-term safety study on a clinical hold. The results of the long-term safety study will be required to support an NDA approval for a chronic condition such as schizophrenia.

Shares of Intra-Cellular closed Friday up nearly 3% at $13.82, with a consensus analyst price target of $31.00 and a 52-week trading range of $10.43 to $45.20. Following the release of the report, the stock was down over 40% at $8.10 in early trading indications Monday.

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