What happened
It seems Catalent(NYSE: CTLT) was apparently the reason why a key drug was refused approval by the Food and Drug Administration (FDA).
According to a media report from a leading financial news agency, this is what likely happened. On this disquieting development, investors traded out of the company's stock on Wednesday. It ended the day more than 3% lower, while the bellwether S&P 500 index more or less traded sideways.
So what
That morning, Bloomberg published an article stating that difficulties at a Catalent factory were the sole reason it denied its approval. The party applying for it was biotechRegeneron Pharmaceuticals(NASDAQ: REGN), and the drug is a stronger formulation of its previously approved Eylea. As its brand name implies, Eylea's main indication is for an eye disorder, in this case wet macular degeneration.
In a press release issued Tuesday, Regeneron said that the complete response letter (CRL) it received from the FDA stated the rejection was due "solely due to an ongoing review of inspection findings at a third-party filler."
Although it did not specifically identify Catalent, that company admitted this stage of production took place at its facility in Bloomington, Indiana. The site was the focus of three observations by the FDA prior to the regulator's decision.
Now what
Bloomberg quoted an unnamed Catalent spokesperson as saying that the company "takes all regulatory observations seriously and has already provided proposed corrective and preventative actions to address these observations."
The official added that "We will continue to support the agency's ongoing review of our response as we work to bring this review to a satisfactory close."
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
