Replidyne and partner Forest Laboratories have been knocked back by the US Food and Drug Administration, which issued a non-approvable letter for faropenem medoxomil, their antibiotic for acute bacterial sinusitis, community-acquired pneumonia, chronic bronchitis and adult skin infections.

News of the rejection hit both companies hard, with shares in Replidyne plummeting 45% to close at $5.59 yesterday, while Forest slid nearly 6% to $48.54.

The FDA has asked for additional clinical trials of the drug, despite the fact that the companies filed a dossier with data from 11 Phase III studies involving 5,000 patients, which could delay the programme by up to two years.

Replidyne said that it had been unsuccessful because of the FDA's recent decision to require that antibiotic developers show that their products are better than placebo, rather than non-inferior to other drugs on the market.

"Based on the filing packages we included in our NDA submission, particularly for ABS and CAP, we are disappointed that the FDA is requiring additional clinical trials," commented Kenneth Collins, Replidyne’s chief executive.

"However, we believe that at the doses studied faropenem has a clearly demonstrated favorable safety profile. Replidyne is in a strong financial position to continue the development of faropenem with our partner Forest and to advance our promising pipeline."

For Forest, the failure of a drug it licensed as recently as February - and the nearest-to-term candidate in its pipeline – puts its reliance on top-selling drug Lexapro (escitalopram) for depression into stark contrast, and emphasises the relief for the company and its investors of the successful defence of the US patent estate for the product in July.

Forest also suffered a setback for another near-term product, nebivolol for hypertension, after the FDA asked for more information on the product before it would grant approval.

Analysts at WR Hambrecht & Co cut their rating for Forest from ‘sell’ from ‘hold’, saying that the firm had lost a key short-term pipeline catalyst. But other observers noted that Forest still has Lexapro, Namenda (memantine) for Alzheimer’s disease and Benicar (olmesartan medoxomil) for hypertension that will support the business effectively over the next couple of years.