Setback for Disc Medicine as FDA Rejects Accelerated Pathway for Key Drug Candidate

Disc Medicine US2546041011

Shares of Disc Medicine experienced a severe sell-off on Friday following a regulatory decision from the U.S. Food and Drug Administration (FDA). The agency declined to grant an accelerated approval for the company's promising therapy, Bitopertin, sending the stock down sharply. The focus now shifts to an ongoing late-stage clinical trial to potentially restore investor confidence.

The FDA's decision centers on a key distinction in the clinical data package. While the regulator acknowledged that Bitopertin successfully reduced levels of the biomarker protoporphyrin IX (PPIX) in Phase 2 studies known as AURORA and BEACON, it found the evidence insufficient. Specifically, the data did not convincingly demonstrate that lowering this biomarker directly correlated with a tangible clinical improvement for patients, such as a meaningful increase in tolerance to sunlight exposure.

This rejection blocks the fast-track path to market for now, with the FDA directing Disc Medicine toward the traditional approval route. Consequently, data from the current Phase 3 trial, named APOLLO, is now essential to address the agency's concerns and support a new application.

Financial Resilience Amid Clinical Delay

Despite the market's negative reaction, Disc Medicine enters this period from a position of financial strength. The company reported year-end 2025 cash and equivalents of approximately $791 million. Management has stated these reserves are adequate to fund operations through 2029.

This substantial liquidity provides a crucial buffer, allowing the company to complete the APOLLO study and prepare for a potential future launch without the immediate pressure to raise additional capital at a depressed share price.

Revised Timeline and Next Steps

The FDA's move necessitates a significant adjustment to the company's previous timeline. Disc Medicine is now concentrating all efforts on concluding the APOLLO trial to generate the evidence required for a resubmission.

• Q4 2026: Topline results from the APOLLO Phase 3 study are anticipated.
• Mid-2027: This period emerges as a new potential window for an FDA decision, assuming positive data and a successful application.

Company leadership has requested a "Type A" meeting with the FDA to gain clarity on the specific requirements for the path forward. Further details regarding the updated strategy will be discussed during a conference call scheduled for Tuesday, February 17.

The stock closed Friday's trading session down approximately 22% at $55.95.