The Rhythm Biosciences Ltd (ASX: RHY) share price had a day to forget on Monday.
The medical diagnostics technology's shares returned from a trading halt and crashed as much as 52% to 46 cents.
The ASX All Ords share ultimately recovered a touch and ended the day with a 38% decline to 59.5 cents.
Why did this ASX All Ords share get hammered?
Investors were hitting the sell button in a panic on Monday after the company was dealt a blow by the Australian Therapeutic Goods Administration (TGA).
According to an announcement, after the receipt and analysis of a thorough application review and its most recent engagement with the TGA, the company has decided to withdraw its current ColoSTAT application for an Australian Register of Therapeutic Goods (ARTG) listing.
Rhythm Biosciences' ColoSTAT product is a simple, low-cost, blood test for global mass market detection of colorectal cancer. It notes that worldwide, colorectal cancer is the third most common cancer in men and the second most common in women, accounting for an estimated 1.9 million new cases and 935,000 deaths annually.
Management advised that it is withdrawing its application because it simply does not have enough time to answer the regulator's questions within the necessary timeframe. This is because some questions will require new internal analytical testing and the TGA is reluctant to provide an extension beyond its 20 business days timeframe.
The good news is that this isn't the end of the road for ColoSTAT in Australia. Management intends to submit a new application with the TGA, in line to better meet their feedback and questions posed. And while the company doesn't know when the new application will be submitted, it does expect it to be in the current calendar year.
Furthermore, this withdrawal does not impede the ASX All Ords share's proposed market entry activities into other CE Mark conforming territories and additional international markets, including the United States.
Management commentary
Rhythm Biosciences' Executive Chairman, Otto Buttula, was disappointed but remains positive on the future. Buttula said:
Having decided to withdraw RHY's current TGA submission for ColoSTAT is clearly disappointing for all stakeholders. Nonetheless, we appreciate the thorough review undertaken and meaningful dialogue with the TGA. Following the TGA's most recent feedback, both written and verbal and management / Board review, we believe that time constraints imposed result in a better opportunity for the Company to submit a new and strengthened application, in line with the questions raised in the TGA application review. Hence, with a new submission to be completed in line with the questions raised by the TGA, we believe we have a better blueprint to follow in framing our new application.
Therefore, I remain confident of a TGA registration for ColoSTAT in the future. Whilst Australia, as our home, remains important, it represents one of the smaller markets in our global aspirations and the Company has always intended to build the majority of its revenues in overseas territories. We look forward to keeping the market abreast of other positive developments in the near term.
