Paradigm (ASX:PAR) share price sinks 8% on FDA update

Here’s why the biotech company’s shares are falling today…

| More on:
a doctor in a white coat with a stethoscope around her neck holds her hands upwards as if to ask 'why' as she sits at her desk and looks at her computer.

Image source: Getty Images

The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price is sinking on Monday morning.

At the time of writing, the biopharmaceutical company’s shares are down 8.5% to $1.92.

Why is the Paradigm share price sinking?

The Paradigm share price is sinking on Monday after it revealed that it has received a written response from the US Food & Drug Administration (FDA).

This is in relation to its Investigation New Drug (IND) submission for pentosan polysulfate sodium (PPS) to treat pain in subjects with knee osteoarthritis.

According to the release, the FDA has given feedback on its IND submission and made one request.

The release notes that the FDA’s outstanding concern is regarding adrenal gland function. This relates to a preclinical finding in the adrenal gland of rats only. It was not seen in the adrenal gland of dogs. Furthermore, adrenal gland malfunction has not previously been seen by Paradigm or bene pharmaChem in their ongoing pharmacovigilance.

Nevertheless, in the written communication, the FDA has requested modifications to the company’s adrenal screening and mitigation plan.

Paradigm plans to amend its clinical trial protocol, including all the FDA’s requests, and respond to the FDA within the next week. After which, the company expects a response from the FDA within the next 30 days.

Paradigm’s Chief Executive Officer, Paul Rennie, appears optimistic that this could be the final hurdle for the company to overcome before it can push ahead with its trial plans in the United States.

He commented: “Although we understand the agency’s obligations for thorough reviews which commenced in March of this year, I am confident that the FDA and Paradigm have now attained a pathway to commence our phase 3 clinical trial in the US.”

The Paradigm share price is now down a disappointing 21% in 2021.

Should you invest $1,000 in Paradigm right now?

Before you consider Paradigm, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Paradigm wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers