US FDA declines to approve Milestone's heart rhythm nasal spray; shares halve

By Puyaan Singh and Siddhi Mahatole

March 28 (Reuters) - Milestone Pharmaceuticals ( MIST ) said on Friday the U.S. health regulator had declined to approve its nasal spray to treat a type of heart condition and had called for an inspection of the facility that performs the testing of the drug.

Shares of the company plunged 60% to trade at a record low of 90 cents following the news.

"We are confident Milestone can address these issues," Piper Sandler analyst Edward Tenthoff said, adding that he anticipates a launch in 2026, although it could prove conservative.

The company had previously expected to launch the nasal spray, Cardamyst, in mid-2025.

The U.S. Food and Drug Administration, in its so-called complete response letter, has also sought additional data on nitrosamine impurities based on new guidance issued after Milestone submitted its application for Cardamyst's approval.

Nitrosamine impurities may increase the risk of cancer if people are exposed to them above acceptable levels and over long periods of time.

"We are committed to working with the FDA to bring the therapy forward as soon as possible," CEO Joe Oliveto told Reuters in a statement.

The FDA highlighted two key chemistry, manufacturing and controls issues related to Cardamyst, but did not raise any concerns about its safety or efficacy.

The FDA's decision marks another setback for the company, which previously received a "refusal to file" letter from the health regulator in December 2023.

The company then resubmitted the marketing application for Cardamyst with changes for substantial review.

The FDA said in its letter the inspection at a facility that performs release testing for Cardamyst was required to ensure it is in compliance with current good manufacturing practices.

The facility changed ownership during the review of the drug, the company said.

The spray is for the treatment of paroxysmal supraventricular tachycardia (PSVT), which causes abnormal heart rhythm and is characterized by episodes of sudden-onset rapid heartbeats.

PSVT affects around 2 million people in the U.S. (Reporting by Siddhi Mahatole and Puyaan Singh in Bengaluru; Editing by Shreya Biswas, Maju Samuel and Shailesh Kuber)