Adds details and background throughout

Feb 2 (Reuters) - Aquestive Therapeutics AQST.O said on Monday the U.S. Food and Drug administration has declined to approve its oral drug for severe allergic reactions.

The company said it received a so-called complete response letter, dated January 30, from the regulator that focused on how the product, Anaphylm, is packaged and used, and not on how it works or is made.

It pointed to results from a user test in which some people struggled to open the pouch or placed the film incorrectly — problems the FDA said could create safety risks during an emergency allergic reaction.

The U.S. regulator had also flagged deficiencies in the treatment's labeling in January.

The company said it can rapidly resolve the deficiencies and expects to resubmit as early as the third quarter of 2026.

The move marks a setback in the company's push to bring a convenient, oral treatment option for severe allergic reactions, including anaphylaxis, and intending to compete with ARS Pharma's Neffy, a nasal treatment for the condition.

William Blair analysts had previously said the FDA's deficiency notice for Anaphylm likely foreshadows a complete response letter, handing Neffy a window to solidify its position as the sole needle-free anaphylaxis option ahead of potential rivals.

Aquestive shares were halted in premarket trading.