BioMarin Pharmaceutical Inc said on Thursday the U.S. Food and Drug Administration had rejected the company's drug to treat a rare muscle-wasting disorder.

The rejection caps months of uncertainty surrounding the drug, Kyndrisa, which was billed to be the first treatment in the United States for Duchenne muscular dystrophy.

DMD, which affects one in 3,600 newborn boys and leads to rapid muscle degeneration, is caused by a gene mutation that results in low production of dystrophin, a protein that is an important part of the muscle tissue.

The company's shares, which have lost about a quarter of their value in the last three months, were down 2 percent at $82.34 in early trading.

Analysts said the decision lifted an overhang, which pummeled the stock in the past few months, and that investors could now move on to the company's next pipeline programs.

The rejection comes after a panel of independent advisers to the FDA indicated that efficacy data on the drug was not persuasive enough for an approval.

FDA staff also raised concerns about potentially fatal long-term side effects such as kidney problems and reduction in blood platelets.

Evercore ISI analyst Mark Schoenebaum said a new trial may be needed in the United States.

The US rejection, however, is not end of the road for the drug: BioMarin expects to hear from the European regulatory advisory committee in April or May with a final decision in the third quarter.

There is currently no FDA-approved therapy to treat Duchenne. Sarepta Therapeutics Inc and PTC Therapeutics Inc are also developing drugs for the indication.

PTC's drug, Translarna, won conditional European approval last year. Sarepta's drug will face an FDA advisory panel next week.

BioMarin said it was reviewing the FDA's response and would work with the regulator to determine its next steps.

(Reporting by Amrutha Penumudi and Natalie Grover in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty)