Ars Pharmaceutical’s stock plunged to a fresh all-time low at the Wednesday market open after the US Food and Drug Administration (FDA) rejected the drugmaker’s needle-free EpiPen alternative. The decision led to a share price drop of 57.5%, erasing over $510 million from the company’s market capitalization.

Ars ‘Very Surprised’ by FDA’s Decision

Shares of the US drugmaker Ars Pharmaceuticals nosedived 57.5% at the market open on Wednesday after the FDA unexpectedly rejected the company’s nasal spray it previously backed.

The steep downturn comes after the FDA, the top health regulator in the US, disapproved an epinephrine nasal spray, Neffy, which would have been the first needle-free emergency treatment for allergic reactions. Moreover, the federal agency requested a repeat-dose study of the drug versus a rival injected product.

Ars said it was “very surprised” by the FDA’s verdict and plans to appeal the decision. The reason for this is that the FDA’s advisory committee voted to recommend approval of the drug in children and adults in May. The regulator rarely disapproves drugs previously recommended by its experts.

Commenting on the rejection, William Blair analyst Tim Lugo said regulators “look to be holding neffy to a much higher standard than comparable products.”

“I’m shocked. You basically have epinephrine autoinjector devices, needle options, and people have been clamoring for years to get a needle-free option.”

– said Dr. Zachary Rubin, an allergist at Oak Brook Allergists.

Ars Pharmaceutical Shares Hit All-Time Low

Nonetheless, Ars’s share price plummeted acutely at the opening bell on Tuesday, pushing it to an all-time low of below $2.8 per share. The last time the stock was trading close to this level was in April 2022.

The current price level marks a significant drop from the $9.1 the stock reached in May following the FDA’s support for the nasal spray. The company’s year-to-date losses widened to over 70%, losing over $510 million in market cap during that period.

Small-cap pharmaceutical and biotech stocks are generally highly sensitive to pivotal developments like this. Investors who trade such stocks are typically more vigilant, as FDA decisions, clinical trial results, and sales figures can trigger substantial market fluctuations.

This article originally appeared on The Tokenist

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