Shares in biotech company Acrux have lost more than quarter of their value as its testosterone replacement product may face stricter labelling restrictions in the US.
A panel of experts has recommended the Food and Drug Administration (FDA) come up with a new wording for warning labels to restrict the use of testosterone replacement drugs.
Acrux is the developer of a popular testosterone replacement drug called Axiron, which is marketed in the US by pharmaceutical giant Eli Lilly.
Acrux shares dived 44 cents, or 26 per cent, to $1.25 on Thursday.
The shares have fallen from $3.18 in the past year due to concerns about possible FDA intervention, though had rebounded substantially since hitting a low of 75 cents in June.
There is a concern that the drugs, which are designed for men suffering from low testosterone due to factors including genetic conditions or chemotherapy, are being prescribed for older men looking to lift their energy levels or sex drive.
The FDA has also recommended drug makers study whether or not use of the drugs can increase the risk of heart attack and stroke.
Acrux on Thursday said it was too early to know whether the FDA would follow the recommendations of the advisory panel.
"It is premature to speculate how the FDA will consider the committee's recommendation today, and whether the prescribing physicians will change their prescribing habits if any labelling changes are required by the FDA," the company said.
It also said there were a number of studies underway into the safety of testosterone products, including one by its US partner.
