Shares of Alimera Sciences and pSivida are plunging after regulators again rejected a retinal disease treatment developed by pSivida and licensed to Alimera.
Alimera says the Food and Drug Administration wants it to run two new trials of Iluvien, a treatment for diabetic macular edema. The FDA refused to approve the drug in 2010, and new trials could delay approval of Iluvien for years or prevent it altogether.
Shares of Alimera fell 75 percent in afternoon trading, while shares of pSivida Corp., which developed the drug and licensed it to Iluvien, fell more than 40 percent.
Alimera says the FDA said clinical trials did not prove Iluvien is safe and effective, and its benefits weren't strong enough to overcome potential side effects like cataracts and increased pressure inside the eye.