Shares of biotech Innocoll Holdings Plc tumbled almost 50% in premarket trade Friday, after the U.S. Food and Drug Administration issued a refusal to file letter for the company's product candidate for a treatment for post-surgical pain. The FDA "determined that the application, which was submitted in October 2016, was not sufficiently complete to permit a substantive review," the company said in a statement. The FDA said Xaracoll should be characterized as a drug and device combination, which would require additional data. "We expect to work with the FDA over the coming weeks in an effort to address the open issues and to define a path forward for a successful re-filing of our application at the earliest point in time," Chief Executive Tony Zook said. Janney analyst Ken Trvobich downgraded the stock to neutral on the news, and slashed his fair value estimate to $2 from $9. He is expecting the news to delay the new drug application by a year and said the company does not have sufficient cash resources to fund its operations through 2017. "We expect the need for additional capital to lead to a future financings that are far more dilutive than we previously estimated," he wrote. Shares are now down 79% on the year, while the S&P 500 has gained 10%.
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