Aquestive Therapeutics Inc. (AQST) had a rough Friday, with shares tumbling more than 40% after the company disclosed that the FDA has identified deficiencies in its application for Anaphylm, an experimental allergy treatment. Trading volume surged to 5.68 million shares compared to the usual 2.79 million, reflecting the market's clear concern about what this means for the drug's approval prospects.

The FDA's Concerns

Here's what we know: The FDA sent Aquestive a notification stating that deficiencies in Anaphylm's New Drug Application are significant enough to preclude discussions about labeling and post-marketing commitments right now. That's regulatory speak for "we need to sort some things out before we can move forward."

The catch? The FDA didn't actually specify what those deficiencies are. Aquestive is now working to understand and address whatever concerns the agency has identified. On the potentially positive side, the FDA emphasized that this notification doesn't represent a final decision on the application, and the review process remains active.

What Is Anaphylm?

Anaphylm (dibutepinephrine) Sublingual Film is designed to treat severe allergic reactions, including anaphylaxis. Think of it as an epinephrine prodrug in a convenient format. The product is about the size of a postage stamp, weighs less than an ounce, and dissolves on contact under the tongue. No water or swallowing required, which could be a meaningful advantage in emergency situations when someone is having a serious allergic reaction.

Aquestive has broader ambitions for the drug beyond the U.S. market. The company plans to submit for regulatory approval in Canada, Europe, and the U.K. in 2026, assuming it can navigate the current FDA hurdles.

The Timeline and Financial Position

The company is now in contact with the FDA to get more specifics about what needs to be fixed. The goal is to address these deficiencies before the scheduled PDUFA action date of January 31, 2026. That's the deadline by which the FDA is supposed to make a decision on the application.

The FDA has indicated that while the review continues, a Discipline Review Letter won't be issued, though information requests could still come during the remaining review period. The company acknowledged that delays in identifying and resolving the specific deficiencies could push back any potential approval.

On the financial front, Aquestive ended 2025 with approximately $120 million in cash and cash equivalents. Management believes this is enough to complete the approval and launch processes in the U.S., if the FDA ultimately gives Anaphylm the green light, while also advancing the drug in international markets.

Competition and Context

Adding another layer to this story, ARS Pharmaceuticals Inc. (SPRY) filed a petition with the FDA back in September 2025 urging the agency to delay approval of Aquestive's treatment. The petition cited concerns about safety, dosing, and real-world use. Whether that petition influenced the FDA's current stance is unclear, but it certainly adds competitive tension to the situation.

Aquestive shares closed down 40.18% at $3.71 on Friday, a steep drop that reflects investor uncertainty about whether and when Anaphylm might reach the market.