Jan 15 (Reuters) - Shares of biotechnology company Neurocrine Biosciences Inc (NBIX.O) fell 9 percent, a day after it disclosed plans to take a $94 million charge in the fourth quarter related to its experimental drug indiplon for treating insomnia.
Indiplon is the lead drug for the San Diego-based company, but has been facing regulatory hurdles and last month was denied approval until it underwent several new clinical trials. The U.S. Food and Drug Administration sought clinical trials in the elderly, a safety study that would pit indiplon against a marketed product, and a preclinical study to evaluate how the drug affects women in the third trimester of pregnancy.
The non-cash impairment charge relates to a prepaid royalty that arose out of a 2004 transaction with Wyeth WYE.N in which Neurocrine acquired Wyeth’s financial interest in indiplon, Neurocrine said in a filing on Monday with the U.S. Securities and Exchange Commission.
The company also said that the $5 million letter of credit that had been issued on its behalf to Morgan Stanley Mortgage Capital was canceled on Dec. 31, 2007.
The letter of credit previously served as a security deposit related to its previous mortgage debt that was retired in December 2007, Neurocrine said.
Shares of the company were down 47 cents at $4.83 in trading before the bell, after closing at $5.30 on the Nasdaq on Monday. (Reporting by Anant Vijay Kala in Bangalore; Editing by Bernard Orr)