Why Reata Pharmaceuticals Stock Is Plunging Today

Shares of Reata Pharmaceuticals (NASDAQ: RETA) were down by about 32% as of 12:21 p.m. EDT on Monday after the company released its second-quarter earnings report before the market opened. The financial results weren't the big story, however: In the update, the company said that its regulatory filing for Omaveloxolone, one of its leading pipeline candidates, could be delayed.

Omaveloxolone is a potential treatment for Friedreich's Ataxia (FA), a rare genetic disorder that causes difficulty walking and impaired speech. Following a successful phase 2 clinical trial, the results of which Reata Pharmaceuticals announced in October, the company had planned to submit the drug to the U.S. Food and Drug Administration for marketing approval. However, the FDA isn't confident that those phase 2 results will support a marketing authorization for Omaveloxolone.

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Source Fool.com