Neumora Therapeutics Inc (NASDAQ:NMRA) shares plummeted after the FDA placed a clinical hold on the company's Phase 1 trial of NMRA-266.

NMRA-266 is a positive allosteric modulator (PAM) of the M4 muscarinic receptor and is part of the Company's M4 PAM franchise.

The clinical hold determination follows recently available preclinical data showing convulsions in rabbits.

Following this action, the Phase 1 single ascending dose / multiple ascending dose study with NMRA-266 has been paused.

Approximately 30 participants have been dosed in the Phase 1 study, with no evidence of convulsions observed in any participant.

Neumora is working with the FDA to evaluate the potential to resolve the clinical hold.

While these discussions with the Agency are ongoing, the company's prior guidance regarding NMRA-266 is no longer applicable. Neumora will provide an update on NMRA-266 when available.

Neumora's M4 franchise includes multiple compounds beyond NMRA-266, each with different chemical composition and properties.

These compounds demonstrated robust activity in preclinical efficacy models, high selectivity for the M4 receptor subtype, and the potential for an oral once-daily dosing profile.

Neumora is advancing preclinical safety and toxicology work with these compounds and expects to submit an IND in 2025.

"We are disappointed with the unanticipated safety findings in rabbits and are discussing next steps with the FDA," said Henry Gosebruch, president and chief executive officer, Neumora...We anticipate several important milestones, including Phase 3 data in major depressive disorder and the initiation of a Phase 2 study in bipolar depression with navacaprant, our kappa opioid receptor antagonist, and the initiation of a Phase 1b study in agitation in Alzheimer's disease with NMRA-511, our vasopressin 1a receptor antagonist."

Price Action: NMRA shares are 14.9% at $11.54 on the last check Monday.