One of the biggest movers in the biotechnology space at the end of last week was Antares Pharma, Inc. (NASDAQ:ATRS). The company reported that it has received some feedback from the FDA regarding the progress of its lead development asset, called XYOSTED (testosterone enanthate), and, put simply, the news isn’t good.

For those unfamiliar with this asset, it is an injectable version of testosterone designed to overcome some of the issues associated with administration in current standard of care format. When you inject testosterone directly into the muscle, it is too quick to dissipate through the bloodstream to be effective as a long-term treatment. As such, enanthate is added, which ensures a slow release, extended type impact. The problem is, however, that when you add enanthate to something, it becomes viscous and this makes it hard to administer subcutaneously. With XYOSTED, Antares has taken testosterone enanthate and put it into a proprietary subcutaneous injector that, so the company hoped, at least, would make subcutaneous delivery simple and effective.

The company submitted its new drug application (NDA) to the FDA in the US earlier this year and the FDA subsequently set a PDUFA date of October 20 for review.

Markets have been loading up on Antares over the last couple of months in anticipation of an FDA decision but, with the latest news, the decision doesn’t look like it’s going to go the company’s way.

So what happened?

At this point, all we know is FDA has stated that the submission has deficiencies that preclude the continuation of the discussion of labeling and postmarketing requirements/commitments at this time. We don’t actually know what the deficiencies are or how easy they’re going to be to fix and, as a result, Antares has taken a big hit on the news.

The company trades for $2.11, down more than 40% on its preannouncement market capitalization.

What is next?

This is all about the above-mentioned uncertainty surrounding the deficiencies in question. If it is an easy fix, there is a good chance that we will see a near-term recovery as markets reassess their interpretation of the development. However, since there is a chance that it is not an easy fix, it’s tough to say with any degree of certainty what happens going forward. One thing is for sure: that the deficiencies are enough to stop the FDA from pushing the asset forward in its current application format, meaning we will almost certainly see the agency in the US issue a complete response letter (CRL) when XYOSTED’s PDUFA comes around on October 20.

With that said, however, the CRL might not have the usual impact on Antares as would be the case if the response came out of the blue. To put that another way, if the CRL sheds some light on exactly why the agency has put forward its concerns, and if said concerns are not as serious initially expected, then we might even see Antares pick up a boost to its market capitalization near term.

Another big mover at the end of last week, but in the opposite direction, was Infinity Pharmaceuticals, Inc. (NASDAQ: INFI). The company announced that it will be presenting data from a phase 1/1b trial of its lead development drug, called IPI-549, as a monotherapy and in combination with Opdivo (nivolumab) in patients with advanced solid tumors, at the 2017 Society for Immunotherapy of Cancer (SITC) Annual Meeting on November 10, 2017.

The presentation has been submitted as part of a late-breaking event and markets have interpreted this announcement as implying that the data will be strong and, subsequently, that the drug should advance into mid to late-stage trials.

Generally, if a company preannounces a presentation like this, it is because management wants to show off the data that is has collected – it is rare that a company will preannounce disappointing data.

At its most recent close, Infinity went for $3.73 a share, up more than 120% on its share price ahead of the data announcement.

There is a good chance that we will see a continuation of this strength heading into the above-mentioned event and, if the data is indeed positive, further strength around and beyond the presentation in question.