(Reuters) - Navidea Biopharmaceuticals Inc said U.S. health regulators rejected its most advanced candidate, radioactive tracing agent Lymphoseek, sending the company's shares down 38 percent after the bell.
Lymphoseek helps locate lymph nodes in cancer patients, enabling oncologists to decide if the cancer has spread or is localized and making it easier to target treatments to each person's particular disease, Navidea said.
The U.S. Food and Drug Administration said the decision was related to issues with third-party contract manufacturing of the injectible drug and did not concern its safety or efficacy.
"We are already working closely with the FDA and our third-party contract manufacturers to address all requirements to support the shortest possible new drug application resubmission and review," Navidea's Chief Executive Mark Pykett said in a statement.
FDA rejected Lymphoseek in the treatment for breast cancer and melanoma. The company is also testing the tracing agent in people with head and neck cancer.
Navidea, which has no approved products, is also working on tracing agents for Alzheimer's.
The company's shares closed at $3.51 on Monday on the NYSE Amex.
(Reporting by Anna Yukhananov in Washington and Zeba Siddiqui in Bangalore; Editing by Don Sebastian)