Investors are voicing their displeasure with a Tennessee company, after it failed to get approval for one of its products to be sold in the US. Stock in Wright Medical Group took a pounding when the FDA rejected a clinical trial for its bone graft substitute.
The drug Augment is supposed to be a replacement for painful bone grafts in orthopedic surgeries. It’s been in development for years, and it’s the reason Wright Medical of Memphis bought Franklin-based BioMimetic last year, in a deal with $380 million.
But the FDA said last week that a clinical trial didn’t include enough high-risk patients. The company can appeal the FDA’s decision. On a conference call with executives, many investors questioned if a new trial would be worth the time and expense. Wright Medical CEO Bob Palmisano said it’s something he’ll have to consider. “We’re not going to keep spending money if its fruitless, if this seems like something that’s not ever going to get approved,” Palmisano said. He added that he’ll meet with the FDA soon to determine his company’s next steps.
Augment is already approved for use in Canada, Australia, and New Zealand.