Ocular Therapeutix, Inc. (NASDAQ:OCUL) has been the subject of some pretty intense scrutiny over the last couple of weeks. The company is trying to bring a drug to market called Dextenza, which is targeting the treatment of ocular pain following ophthalmic surgery. This is a pretty big unmet need and one for which Dextenza looks like it could be a neat solution. While the drug seems to work, however, and do so without introducing any major side effects, certain manufacturing issues have held the company back from approval and market interpretation of these manufacturing issues have dictated sentiment in the stock for the majority of 2016 and into this year.

The latest development came at the beginning of this week when reports hit press that aluminum contamination in the active compound (as resulting from the manufacturing process) is yet to be resolved and that this could impact the FDA’s decision ahead off a PDUFA set for July 19. While these reports were pitched as fresh information, they were essentially a rehash of information that initially hit press as part of a Form 483 (a standard release subsequent to a manufacturing facility inspection) that outlined, among other contaminants, the presence of aluminum the drug.

Ocular took a nearly 40% hit on the back of the reports this week and then recovered somewhat during the session on Tuesday on the back of the company reporting that it had submitted an amendment to its initial application with the FDA. The amendment seemed to indicate that the company had a resolution in hand for the problem and that – if given a little more time – it could get the resolution in place and avoid severely delaying the approval timeframe for the drug.

Subsequent to the amendment notification, the company rallied more than 20% and market sentiment eased considerably.

Fast-forward 24 hours, however, and things have changed once again.

After the markets closed on Tuesday, the FDA issued a Complete Response Letter (CRL) to Ocular, citing manufacturing issues as the root of the agency’s inability to approve the drug based on the NDA in its current form. A flurry of lawsuits has followed (as is so often the case when a company picks up a CRL like this) and the company has once again turned to the downside.

Premarket on Wednesday, Ocular trades for $5.50 a share, down more than 32% on its preannouncement pricing and flirting with lows of its 52-week range at $4.04.

So, what is next?

Well, it’s now a case of how quickly the company can respond to the CRL and get things in order before resubmitting to the agency. The accompanying note from the FDA informed markets that the agency didn’t have a chance to review Ocular’s amendment before issuing the CRL and that Ocular will be allowed to incorporate the amendment in its response. There is a chance that this incorporation could minimize the resubmission time, based on the idea that the company already has the information it needs in hand to overcome the manufacturing issues in question.

With that said, we don’t know the details of the CRL specifically, and there is a chance that the amendment might not cover all the pertinent concerns.

Looking forward, we expect this one to maintain its weakness until further clarity is added to the situation. If the company can resubmit relatively quickly, it could recover in line with the resubmission. However, if the situation drags on, and Ocular isn’t able to base the resubmission in its entirety on the already submitted amendment (very likely) then the weakness we are seeing right now could last throughout the latter half of 2017.

For shareholders, of course, this isn’t a great situation. Many were hoping for a positive outcome come July 19 PDUFA and the necessity to hold onto the stock longer in order to see any sort of return (and the capital expense that this extended holding will bring with it for Ocular) puts said shareholders in a bit of a bind.

Until we get some fresh information as to just what the FDA is worried about, it’s difficult to speculate as to the outcome of the ongoing concerns. The more risk-averse may wish to stay on the sidelines for this one until things get a little clearer.