Although the news of a complete response letter (CRL) for its pediatric peanut allergy patch might not have come as a surprise to everyone, Wall Street hammered shares of DBV Technologies SA (NASDAQ:DBVT), taking away 41% of their value, or $1.70, to set the midday trading price at $2.40.

The CRL for Montrouge, France-based DBV relates to Viaskin Peanut (DBV-712), a once-daily epicutaneous (EPIT) patch for children ages 4 to 11. U.S. gatekeepers said they can’t approve the BLA because of concerns about the impact of patch-site adhesion on efficacy. The FDA wants DBV to modify the patch, which means a new human-factor study; officials also require clinical data for the modified patch. As if that weren’t enough, DBV needs to come up with more chemistry, manufacturing and controls info. The agency didn’t cite any safety hitches with the product.

DBV said it will ask for a meeting with the FDA to find out more, and promised an update afterward that will include details about the firm’s cash runway after the recent restructuring. The company said in late June that it plans to scale down spending on clinical and preclinical programs other than Viaskin Peanut, which will allow the €262.4 million (then US$295 million) that the company had in cash and cash equivalents at the end of the first quarter of 2020 to fund operations significantly beyond management's previous guidance of the first quarter of 2021.

In March, DBV disclosed that regulators had sticky questions about the patch, and a meeting of the Allergenic Products Advisory Committee slated for May 15 was called off. The PDUFA date of Aug. 5 remained unchanged, but the setup didn’t bode well. In late 2018, company voluntarily withdrew its Viaskin Peanut BLA following verbal and written word from the FDA about manufacturing and quality controls.

SVB Leerink analyst Joseph Schwartz called the CRL “an unexpected major blow to the company, given the agency will not approve Viaskin’s existing product design, and DBV will likely have to return to the clinic upon modification of the EPIT patch. While prior FDA communications appeared to center around manufacturing and adhesion issues, it is now clear to us that the FDA also had reservations regarding Viaskin Peanut’s previously generated clinical data,” he wrote in a report. DBV’s phase III trial called Pepites failed to clear the 15% lower bound of the 95% confidence interval in the difference in response rates between the active and placebo arms, he noted. “Although we continue to see value in the overall approach of EPIT for peanut allergy, it is unfortunate that the missteps of DBVT’s prior [management] are coming back to haunt the current company,” Schwartz said, adding that his model for the company is under review.