Shares of Alexza Pharmaceuticals plunged amid reports that the US Food and Drug Administration (FDA) has declined to approve new anti-psychotic medication loxapine.

The medication, intended to treat schizophrenia and bipolar disorder, has allegedly been refused due to concerns that the inhaler used to administer the drug could cause lung damage.

The US based-drug manufacturer has announced its intention to meet with the FDA and address the concerns as soon as possible.

No major respiratory side effects were discovered in clinical trials, however the FDA expressed concern surrounding earlier data that showed users displayed decreased lung function.