Boston-based Intarcia Therapeutics became the latest casualty of the FDA’s manufacturing standards. The agency has rejected Intarcia’s implanted diabetes drug/device, which company execs have long insisted is on a straight path to blockbuster sales.

Right now, says the biotech, it’s on a clear path to fixing the problems — whatever regulators found. The biotech says it does not expect to be ordered to conduct “new pivotal trials or any long lead-time CMC activities.” That sounds simple, but in this system, CRL letters are private, with no way to check for accuracy or parse the word “pivotal.”

Kurt Graves

Intarcia CEO Kurt Graves touted the usefulness of ITCA 650 — and he rarely misses any opportunity to promote the product — which is designed to deliver stable doses of exenatide with twice-yearly tune-ups. The idea is that the huge number of patients who have been diagnosed with type 2 diabetes but still aren’t being treated properly can now become compliant with this device, offering access to an enormous market.

That pitch has attracted a mountain of cash and a bevy of investors, including the Bill & Melinda Gates Foundation. Early this year Intarcia added more than $200 million to its Series EE, which now stands at $600 million as the company maintains close ties to its syndicate. And the company has been valued at more than $5 billion — making it a rare biotech unicorn that has now been badly hobbled, for now.

Noted Graves:

We remain confident in the approvability of ITCA 650, and have an unwavering commitment to bring forward a new category of medicines that are fundamentally designed to address major unmet needs in diabetes and other serious chronic diseases.