Shares of ARS Pharmaceuticals Inc (NASDAQ:SPRY) plummeted 51% in premarket trading after the US Food and Drug Administration (FDA) unexpectedly declined to approve its needle-free nasal spray, Neffy, designed for emergency treatment of allergic reactions.
The decision came as a shock, especially since the FDA's independent experts had endorsed the spray in May.
The health regulator has requested additional comparative testing against existing injectable treatments before potentially approving Neffy.
This marks a departure from an earlier agreement in August, where such tests were to be conducted post-approval.
ARS Pharma expressed surprise at the FDA's decision and plans to appeal.
Analysts suggest that the FDA appears to be holding Neffy to a stricter standard than similar products on the market.
EpiPen manufacturer Viatris had earlier petitioned for more rigorous trials for Neffy, which is considered an alternative to EpiPen and other epinephrine-filled autoinjectors.
Pre-market, the stock was changing hands for $3.15, down $3.46.