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Next Science (ASX:NXS) shares fell -13% on Tuesday morning trades, to 10cps, after the company revealed it’s received a warning letter from the FDA.
The news isn’t what investors really want to hear – evidenced by the sell-off on Tuesday. Then again, getting a warning letter from the FDA is quite clearly undesirable in itself.
The company, developing its XBIO product suite – in a word, bacterial biofilms – basically got told to clean up its facility after a visit by the FDA in August and September of last year.
But there was one more worrying point buried in NXS’s Tuesday announcement.
“During the inspection, the FDA found that Next Science had failed to timely submit reports to the FDA regarding information that suggested a device marketed by the Company may have contributed to serious injury,” the company wrote.
How a biofilm can cause serious injury is a good question indeed.
Quality system violations were also noted by the FDA, which boiled down to the facility used for “packing, storage or installation did not conform” with FDA standards. Despite Next Science telling the regulator it corrected those problems, the regulator wasn’t so sure.
“The Warning Letter states that the FDA cannot at the date of the letter determine the adequacy of the Company’s corrective actions and notes that the Company’s corrective actions are ongoing,” NXS wrote on Tuesday.
Further, Next Science was going ahead and adopting language it could only use if it had premarket approval to marketing terms including a range of products. Next Science did not have premarket approval.
In short – not a good look for the biotech company.
NXS last traded at 10cps.
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