End of 2016 didn’t go well for Cempra Inc (NASDAQ:CEMP), since the U.S. Food and Drug Administration recently denied approval to company’s pneumonia drug. The FDA said that the administration will not give its nod to the pneumonia drug until and unless Cempra releases additional safety data along with facility improvements in manufacturing it.

Tumbling shares on account of FDA’s red light to pneumonia drug

Following the story, the company’s shares dwindled in the market last Thursday. This was not a good sign for Cempra since FDA’s denial to its drug plunged its shares to the lowest ever since company’s inception in the public podium.

FDA needs drug safety modification

In a recent press release, Cempra said that it received a detailed response letter from FDA in lieu to new drug applications (NDAs) for bacterial pneumonia. The company’s drug is called solithromycin, which will prove to be an effective treatment for the disease.

FDA, in its letter, stated that it was unable to approve the drug in its present form and additional safety needed to be provided for it. FDA also hinted to resolve in its manufacturing facility, the “unspecified issues.”

FDA believes that the safety databases provided by the company (i.e. 920 patients), was too small to calculate drug’s side effects. FDA has recommended the company to go for a larger database of as many as 9,000 patients.

This, according to FDA, will enable the company to measure drug-induced liver injury with a much higher probability.

Cempra assuring investors with “sufficient funds”

The company, in response to the letter, will negotiate with FDA, clarifying the issues raised by the administration. Meanwhile, it also stated that investors should remain assured since Cempra still has “sufficient funds” to keep the business going.

Cempra claims to have over $225 million cash in hand, along with solithromycin based patent protection. At present, however, if Cempra decides to go for new trial, it has no way to measure the cost in advance, as explained by David Zaccardelli, the CEO.