Veru Inc (NASDAQ:VERU) shares lost half their value after its pill to treat high-risk patients hospitalised with Covid was rejected by US regulators.
The US Food and Drug Administration's Pulmonary-Allergy Drugs Advisory Committee voted 8-5, citing concerns over efficacy and safety data from the small trial of sabizabulin.
Veru tested the drug in a late-stage study of 210 patients with moderate to severe Covid at risk of acute respiratory distress syndrome (ARDS).
The lungs of people in this situation cannot provide enough oxygen to other vital organs.
One panel member said the trial data was "impressive" but there was "no direct evidence to support the antiviral activity".
Another said the results of the trial showed "enough promise to deserve a future study".
The FDA has previously proposed to Veru that a 500-patient sample size would be better.
"We look forward to continuing to work with the FDA as we continue our efforts to ensure that this product is available to patients in a timely manner," Veru chief executive Mitchell Steiner said in a statement.