Auxilium Pharmaceuticals Inc. said it suspended patient dosing in two ongoing Phase III studies of AA4500 in Dupuytren's contracture after about one-fourth of the lots manufactured failed to pass a visual inspection.

During routine stability testing, some vials of AA4500, an injectable enzyme product, appeared to have higher than expected moisture content, and the company is conducting an investigation "to determine the root cause," Armando Anido, president and CEO, said during a conference call.

Shares of Malvern, Pa.-based Auxilium (NASDAQ:AUXL) slipped $1.49, or 9.3 percent, on the news Thursday, closing at $14.47.

Anido said tests of the AA4500 vials already excluded the possibility of a defective container, which means the issue likely is related to the lyophilization process.

Since the issue was discovered a few days ago, Auxilium has been "working feverishly" to resolve the problem, Anido said, though "it's still too early to speculate on the impact" to the development timeline.

During the visual inspection, 73 percent of the lots passed and 27 percent failed. The company said it is not clear whether the entire batch will have to be discarded.

Auxilium has contacted the FDA, Anido said. "We're obviously disappointed by this development," he said. "But we believe that [temporarily halting patient dosing] is the right thing to do for the company and for patients."

No adverse reactions have been reported from patients who have been dosed in the trials, and investigators are expected to continue monitoring those patients in accordance with the trial protocols.

The trials are designed to measure the effect of AA4500 in Dupuytren's contracture, a condition in which the joints in the hand contract and impair the ability for patients to move their fingers. The primary endpoint of both studies is the reduction of the contracture angle to within 0 to 5 degrees of normal as measured by digital geometry.

The U.S. study is expected to enroll more than 200 patients randomized on a 2:1 basis to receive either AA400 or placebo, and the ex-U.S. study is expected to follow similar protocol and involve about 60 patients in Australia and Switzerland.