Shares of Sunesis (SNSS) are down 72% today after the company reported a regulatory update from both the FDA and EMA regulatory bodies. Sunesis is working on obtaining approval for Vosaroxin in both the u.s. and Europe, to treat patients with Acute Myeloid Leukemia — AML. AML is a blood cancer that inhibits proper cell growth. 

In terms of Europe Sunesis got the okay from the EMA to submit a marketing Authorization Application — MAA — for approval of Vosaroxin in refractory/relapsed AML. This is because of the benefit that patients saw taking Vosaroxin together with cytarabine for these patients with refractory/relapsed AML. 

The problem –  and the huge drop – came because of the meeting with the FDA. The FDA stated that Sunesis did not achieve the phase 3 primary endpoint goal of Overall Survival. Therefore the FDA told Sunesis that it did not support a filing of the NDA for approval, and that the company will have to conduct further trials in order to attempt to gain approval in the U.S. 

This means that Sunesis will more than likely have to recruit for another phase 3 trial with Voxaroxin and attempt to try again with a new trial design. It will probably take a few years and even then it is not a guarantee that the data will be good. Right now Sunesis states that it will reevaluate its plan with respect to obtaining an FDA approval in the U.S. but things aren't looking good on that front. 

There may be a chance to make some money at this lower price as a small catalyst could be when the MAA application is filed for Europe and when Europe potentially approves Vosaroxin. Still it is quite risky as EMA approval is likely at this point, but still not even that is guaranteed.