Neurocrine Biosciences' high dosage of an investigational sleep drug, it is developing with Pfizer Inc., was rejected by US regulators.

San Diego-based Neurocrine said the US FDA deemed the drug called indiplon as "approvable" in its 5 milligram and 10 milligram doses, but rejected the 15 milligram XR version of the tablets.

"The FDA response was a surprise to us," chief executive Gary Lyons said adding, "We're still trying to digest the information and estimate our timeline."

He said it was disappointed with the FDA's decision and will meet with the agency to discuss the next steps.

The drug would join the growing $2.2 billion market for sleep drugs, which includes market leader Sanofi-Aventis SA's Ambien. Pfizer, the world's biggest drug maker, plans a direct-to-consumer campaign to market the drug.

The rejected dose suggests the companies' clinical trial data may be insufficient to support approval.

The drug would compete with several other treatments for insomnia such as Ambien, Sepracor Inc.'s Lunesta, and Takeda Pharmaceutical Co.'s Rozerem.

Neurocrine said the FDA indicated that they did not have an opportunity to review all of the information submitted during the new drug application review cycles.