Hikma Pharmaceuticals' shares fell nearly nine per cent today after its asthma drug's second application was turned down by US regulators.
The FTSE 100 firm's shares were down 8.95 per cent at 1,781p in afternoon trading following the Food and Drug Administration's (FDA) decision not to approve Hikma's generic version of GlaxoSmithKline's (GSK) Advair Diskus.
The drug, an inhalation powder used to treat asthma and chronic lung disease, was rejected due to "major" issues with the application, according to Hikma, which was the top faller on the FTSE index.
"Given the nature of the feedback, Hikma believes there is a low likelihood of approval this year," Hikma said, adding it is committed to bringing its "important" product to the US market.
The rejection of the cut-price generic drug is good news for GSK, and it follows the FDA's rebuff of another Advair copy made by pharmaceutical firm Mylan.
Hikma and Mylan were both given so-called complete response letters from the FDA which said their drugs needed "major" improvements.
The drug maker said it is now in the process of reviewing the response and will provide an update on its application "as soon as practicable".
"Based on the initial assessment, no material issues were raised regarding the substitutability of the proposed device," Hikma added.
According to Reuters, UBS analyst Michael Leuchten said the problems Hikma and Mylan face highlighted the challenges of getting a generic copy of Advair past the FDA, although such copies were already available in Europe.
Despite the difficulties, GSK expects generics to come through eventually, and Leuchten said the pharmaceuticals firm is already giving a 20 per cent discount on Advair this year in anticipation.
Hikma, which makes and markets branded and non-branded generic drugs, last month reported its full-year operating profit stood at $302m (£235m), down 21 per cent from the previous year but above expectations.