(Reuters) - Acer Therapeutics Inc said on Tuesday the U.S. Food and Drug Administration declined to approve its treatment for a severe, rare genetic disorder that can cause blood vessels to fatally rupture, sending its shares plunging as much as 78%.
The treatment, Edsivo, aims to treat vascular Ehlers-Danlos syndrome (vEDS)- the most severe type of a hereditary disorder of the connective tissue.
The agency, in its complete response letter, has asked Acer to conduct a clinical trial to determine the efficiency of Edsivo in treating patients with vEDS, Acer said.
"We expect to respond to the FDA in the third quarter of this year," Acer Chief Executive Officer Chris Schelling said.
"The FDA is requesting a new adequate and well controlled clinical trial prior to approval, which we believe will likely require several years for execution," William Blair analyst Tim Lugo said.
Lugo downgraded the Acer stock to "market perform" from "outperform" on Tuesday citing "the disappointing FDA decision and the uncertain future" for the treatment.
Acer had cash and cash equivalents of about $31.8 million at end of the March 31, according to its quarterly regulatory filing.
Edsivo's marketing application was based on data from an analysis of a 2010 European study involving 53 patients.
The small group size, however, raised questions among experts about the adequacy of the trial results.
Although, some analysts have been bullish on the treatment's prospects, citing patient follow-up data recently published in a medical journal showed that those treated with the treatment over several years lived longer.
Acer shares have plunged to their record low of $4.20 in morning trade on Tuesday.
(Reporting by Manojna Maddipatla and Aakash Jagadeesh Babu in Bengaluru; Editing by Shinjini Ganguli and Shailesh Kuber)