Starpharma Holdings Limited (ASX: SPL) shares have taken a hit this morning. At the time of writing, the Starpharama share price is trading 9.71% lower at $1.535.
What's dragging the Starpharma share price down?
Starpharma shares are well in the red on Monday after the company advised its UK retail partner, LloydsPharmacy, has received correspondence from the UK Medicines and Healthcare Products Regulatory Agency (MHRA) regarding the promotional claims for the company's VIRALEZE antiviral nasal spray.
According to today's statement, the correspondence is flagging the company's promotional claims, including "references to SARS-CoV-2 and COVID-19, and the interrelationship between these product claims and its categorisation".
The announcement said that the MHRA is not questioning the safety or the quality of VIRALEZE, but the "allowable promotional claims".
VIRALEZE is an antiviral nasal spray which has been shown in laboratory studies to inactivate a range of respiratory viruses, including 99.9% of SARS-CoV-2 and COVID-19.
What happens now?
Starpharma disagrees with MHRA's stance on its promotional claims and is working to resolve the matter as quickly as possible.
The company believes it has extensive data, including expert regulatory advice and input from an EU regulatory body, to support the product and its promotional claims.
However, as a resolution is sought, Starpharma has agreed to temporarily pause UK VIRALEZE sales.
The company reassures that the temporary pause in sales is specific to the UK, and does not impact other markets including Europe and India.
The update also advises that Starpharma is rapidly progressing commercialisation and supply arrangements for the Indian market.
Whipsaw like action for the Starpharma share price
Despite having rallied significantly since its March 2020 lows, the Starpharma share price has been highly volatile over the past year. The company has seen significant share price rallies followed by sharp selloffs.
Starpharma shares surged by around 50% from 25 August to a high of $1.95 on 1 September last year. This was likely driven by announcements including a strong full-year results release and positive updates for the VIRALEZE product.
But by the end of December 2020, the Starpharma share price had shed around 20% of its value and was trading at $1.565.
A similar situation occurred this year, with the company's shares rallying some 67% from 27 January to a record high of $2.52 on 16 February.
Fast forward to today, about 40% of Starpharma's market capitalisation has been wiped since its February highs.
Today's sharp selloff has now dragged the Starpharma share price into negative year-to-date territory, with 2021 returns sitting at around -2%.
Despite the company pushing ahead with regulatory activities for VIRALEZE for a number of important markets and geographies, investors are likely weighing in on the pause in UK sales.
