Updates shares, adds analyst comment in paragraph 5 and 12

By Siddhi Mahatole

Feb 17 (Reuters) - Disc Medicine IRON.O said on Tuesday it will pursue a traditional U.S. approval pathway for its rare disease drug after the Food and Drug Administration declined to approve the treatment under a new fast-track review program.

Reuters had exclusively reported last month that FDA reviewers pushed back review of bitopertin by two weeks on concerns about trial data and the drug's risk for abuse.

Shares of the company were up nearly 15%.

Disc was testing bitopertin as a treatment for erythropoietic protoporphyria, a blood disorder that makes patients extremely sensitive to sunlight.

"It remains less obvious to us the exact moment when FDA officials became skeptical about the data package for bitopertin's NDA," said BMO Capital Markets analyst Evan Seigerman.

Bitopertin was being reviewed under the FDA's "national priority voucher" program, which fast-tracks the process to one to two months from the typical 10-12 months.

The drug was being reviewed under the accelerated approval pathway, in which the FDA evaluates whether changes in a biomarker is reasonably likely to predict clinical benefit.

Most companies then seek traditional approval from the agency, which typically leads to higher use and better insurance coverage.

While the policy debate around accelerated approval has been going on for years, "recent decisions have indicated an increasingly stringent approach to this question of when an accelerated approval is appropriate," CEO John Quisel said.

Quisel said he expects a potential decision on traditional approval around mid-2027.

The company expects late-stage data on the drug in the fourth quarter this year, but modifying the trial "is not on the menu right now," he added.

Seigerman said that late-stage trial design "gives us confidence in the potential for positive results in late 2026."

Quisel said that "there was no obvious skepticism apparent in information requests as we went along" and added that the first indication of potential challenges came from media leaks, which he said were unexpected.

(Reporting by Siddhi Mahatole in Bengaluru; Editing by Leroy Leo and Shailesh Kuber)

((siddhi.mahatole@thomsonreuters.com;))