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Biotech / Medical : VD's Model Portfolio & Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: Vector1 who wrote (9125)	1/18/2002 6:12:44 AM
From: sim1	Respond to of 9719

Cubist plunges 46% on drug trial failure By Naomi Aoki, Globe Staff, 1/18/2002 Shares of Cubist Pharmaceuticals Inc. fell 46 percent yesterday on news that the company's antibiotic failed to prove it was as effective as a rival drug in treating a severe form of pneumonia. The Lexington company's stock closed at $17.02 a share on the Nasdaq Stock Market in unusually heavy trading, down $14.73 from the previous day's close. The stock began a rapid descent after Wednesday's close when the company announced that results from a pneumonia study of its antibiotic, Cidecin, fell short of the study's goals. The news was particularly devastating because Cidecin would be Cubist's first marketed product. The company had planned to seek regulatory approval later this year for the drug, putting it on schedule to reach the market in late 2003. The unexpected results cast doubt on the drug's prospects. Analysts are estimating that its approval will be delayed by at least a year. Until the company meets with regulators and reveals its plans, however, they say, it is impossible to accurately predict the timing of the drug's launch or its sales potential. ''This is their lead product, most of the value of the company is tied up in the success of this drug,'' said Jason Kantor, a biotechnology analyst with JP Morgan Chase in New York. ''Even if you assume there will be no other impact, a one-year delay is a lot of money in the pharmaceutical business.'' Earlier studies had shown that the drug is effective in treating serious skin infections, and the company had planned to seek US Food and Drug Administration approval of Cidecin as a treatment for both skin infections and pneumonia. Jennifer LaVin, a spokeswoman for Cubist, said the company would discuss with the FDA the possibility of seeking approval based solely on its studies to treat skin infections and safety data from the skin infection and pneumonia studies. LaVin said the company would also conduct market research to determine how likely doctors, hospitals, and managed care plans would be to use and pay for Cidecin if it were only approved to treat skin infections. She also stressed that although the antibiotic failed to meet the study's overall goals, it had been effective in 79 percent of patients. The antibiotic, ceftriaxone, however, to which Cidecin was being compared, was effective in 87 percent of patients. ''This is a temporary setback,'' LaVin said. ''It doesn't diminish our commitment to the development of Cidecin.'' Naomi Aoki can be reached by e-mail at naoki@globe.com. This story ran on page C3 of the Boston Globe on 1/18/2002.