Regulators in the USA have declined to give the green light to Alexza Pharmaceuticals' inhaled antipsychotic Adasuve, expressing concerns about manufacturing deficiencies.

The firm has received a complete response letter from the US Food and Drug Administration for Adasuve (loxapine) inhalation powder, which is being developed for the acute treatment of agitation associated with schizophrenia or bipolar I disorder in adults. In the letter, the agency noted that during a recent inspection of the firm's manufacturing facility in Mountain View, California, its field investigator noted deficiencies for which "satisfactory resolution…is required before this application may be approved".

In December 2011, the Psychopharmacologic Drugs Advisory Committee of the FDA voted 17-1 that the inhaled formulation of loxapine, which has been available for over 35 years, is effective. However, the panel was split (9-8 with one abstention) over safety but did recommend that Adasuve be approved in conjunction with a risk evaluation and mitigation strategy.

Despite getting the CRL, Alexza is upbeat, saying it believes "the deficiencies are medical device-specific and readily addressable".  The company plans to meet with the FDA "to gain a better understanding of the specific deficiencies" and "resolve the remaining issues in a timely manner". There were no new clinical or safety issues identified and there were no other deficiencies outlined in the CRL and Alexza added that "there is substantial agreement" with the FDA on the REMS and product labelling.

Initially Alexza shares fell 11.6% to $0.61 but rose 6.6% in after-hours trading, with investors confident the firm will ultimately get approval for a drug.