The rejection by the U. S. health regulator on Wednesday, of a superbug drug being developed by Basilea Pharmaceutica of Switzerland and U. S-based Johnson & Johnson has resulted in a setback and cropping a dispute between the companies over J&J's handling of clinical trials that were intended to result in the market approval for the product.

The drug Ceftobiprole, is designed to treat superbugs as methicillin-resistant Staphylococcus aureus.

The Food and Drug Administration determined data from two studies "to be unreliable or unverifiable, raising concerns regarding the overall data integrity for both studies" and recommended that two new studies should be conducted, Basilea said in a statement.

The incident caused another setback after Basilea shares plunged 20 percent to 61 Swiss francs on the news by 0920 GMT on Wednesday.

The U. S had previously delayed its decision on approval of the broad-based spectrum antibiotic to treat MRSA last year, citing that they need more audits of clinical sites for ceftobiprole, causing a steep fall in the company’s shares.

FDA argued that research on the drug, which is intended to treat complicated skin and skin structure infections, could not be relied on.

Adding to this, Basilea submitted an arbitration request, claiming that J&J breached their license pact by failing to secure approval of the drug's use for skin infections.

Basilea aims to proceed with the process of ceftobiprole, its chief executive Anthony Man claimed. In contrast, Johnson & Johnson said it planned to discuss "the best path forward" with the FDA as soon as possible.