(Reuters) – Shares of Lexicon Pharmaceuticals Inc plunged 40% on Monday after the company’s appeal to the U.S. health regulator’s rejection of its add-on treatment for type 1 diabetes patients was denied.
The company said it intends to reappeal with the U.S. Food and Drug Administration’s Center for Drug Evaluation and Research.
The FDA declined to approve the drug, sotagliflozin, which was co-developed with Sanofi SA, earlier this year after a panel of outside experts failed to reach a consensus if the drug should be approved as an add-on to insulin therapy.
Concerns of risk of diabetic ketoacidosis (DKA) were raised by the panel members in January, leaving them divided over whether the treatment’s benefits outweighed the risks.
DKA, an inherent complication associated with type 1 diabetes, is a life-threatening condition in which a certain type of acid, called ketones, build up when the body starts to use fat instead of glucose as a source of energy.
Sotagliflozin works by inhibiting the proteins SGLT1 and SGLT2 to help regulate blood glucose levels and reduce the risk of weight gain.
Shares of the company fell 40.5% to $2.10 before the opening bell.
Reporting by Trisha Roy in Bengaluru; Editing by Shinjini Ganguli