Pfizer’s stock plummets after the FDA rejects an OPKO-backed rare disease drug.

Pfizer stock fell on Monday after the Food and Drug Administration rejected its rare-disease drug, prompting a smaller drop in Merck stock.

The companies were issued Complete Response Letters, indicating that the FDA refused to approve their drugs. Pfizer (PFE) and its partner OPKO Health (OPK) set out to treat children with growth hormone deficiency. Merck (MRK) requested permission to market a chronic cough treatment.

Both companies have stated that they are in discussions with the FDA to determine the next steps. Pfizer did not specify why the regulatory shutdown occurred. Merck stated that the FDA’s decision had nothing to do with the safety of its drug.

Pfizer stock fell 2.4 % to close at 51.54 on the stock market today. OPKO Health’s stock dropped 23.8 percent to $3.23. Merck’s stock dropped 1.4 percent to close at 78.83. The action spread to pharmaceutical stocks, which closed down a fraction after falling as much as 4.4 % earlier.

Pfizer’s stock continues to fall.

The Pfizer-OPKO failure is a boon for Ascendis Pharma (ASND), which received FDA approval last year for its weekly growth hormone injection. In early trading Monday, Ascendis stock rose 1.9 percent to near 110.20.

In 2014, Pfizer and OPKO struck a deal worth $295 million upfront and up to $275 million in potential milestone payments. The drug, known as Ngenla, has been approved by regulators in Japan, Canada, and Australia. It is also being considered in Europe.

The news caused Pfizer’s stock to continue its decline, which began in late December.

According to MarketSmith.com, shares are trading below their 50-day moving average. According to IBD Digital, Pfizer stock still has a strong Relative Strength Rating of 97, putting it in the top 3% of all stocks for 12-month performance.

Merck’s stock has been under pressure in the last two weeks. On Monday, the stock’s 50-day moving average collided with it. Gefapixant, a chronic cough treatment, was rejected by the FDA. Gefapixant was approved by Japanese authorities last week. It is sold under the brand name Lyfnua there.