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Shares of Acorda Therapeutics, Inc. (ACOR - Free Report) have plunged almost 25% after the company announced that it has received a refusal to file (RTF) letter from the FDA in connection with the new drug application (NDA) for pipeline candidate, Inbrija.

Notably, Acorda is seeking approval for Inbrija (CVT-301, levodopa inhalation powder) in the United States as a treatment option for symptoms of OFF periods in people with Parkinson’s taking a carbidopa / levodopa regimen.

Shares of Acorda have underperformed the industry year to date. The stock has increased 3.7% as against the industry’s 9.7% gain during the period.

We remind investors that Acorda had submitted the NDA as a 505(b)(2) application in June and was expecting the FDA to inform whether the application was complete by the end of September.

However, the FDA has deemed the application incomplete after a preliminary review and as a result, the regulatory body now requires additional supporting information to review the application.

The FDA stated two main reasons for the RTF: date specification as to when the manufacturing site can be ready for inspection and questions related to drug master production record. Additionally, the FDA has also asked for some extra data, unrelated to the main issues of the RTF.

Notably, Acorda mentioned that it will request the FDA for a Type A meeting in a bid to resolve the issues.

The FDA’s refusal for Inbrija’s NDA is a major setback for the company as this would delay its commercial launch, previously expected in the first half of 2018. However, good news is that the FDA has not recommended any additional efficacy/safety study to be conducted to resubmit the filing.

It is important to note that the NDA application was based on positive data from one phase III safety and efficacy study (SPAN-PD) and from two ongoing long-term safety studies (CVT-301-005 and CVT-301-004E) on people with Parkinson’s.

Significantly, Acorda is planning to submit regulatory applications for Inbrija in the EU by the end of 2017 for the given indication.

Going forward, we expect investors to remain focused on further updates on this development around Inbrija.

Zacks Rank & Stocks to Consider

Acorda currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the pharma sector are Akebia Therapeutics, Inc. (AKBA - Free Report) , Aduro Biotech, Inc. (ADRO - Free Report) and ACADIA Pharmaceuticals Inc. (ACAD - Free Report) , all three carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Akebia’s loss per share estimates narrowed from $4.14 to $3.85 for 2017 and from $1.98 to $1.88 for 2018 over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 25.93%. Its share price soared 60.5% so far this year.

Aduro Biotech’s loss per share estimates reduced from $1.46 to $1.32 for 2017 and from $1.41 to $1.24 over the last 30 days. The company delivered positive surprises in two of the trailing four quarters with an average beat of 2.53%.

ACADIA’s loss per share estimates narrowed from $2.82 to $2.59 for 2017 and from $2.07 to $1.92 for 2018 over the last 30 days. The company came up with positive earnings surprises in two of the last four quarters with an average beat of 7.97%.

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