Oncothyreon shares tumble on cancer drug delay

NEW YORK (AP) ? Shares of the biotechnology company Oncothyreon plunged more than 40 percent Tuesday on word that its most advanced drug candidate, a cancer treatment, will not be released until next year.

Merck KGaA, the Seattle company's drug development partner, on Tuesday erased hopes that Stimuvax would hit the market sooner.

Stimuvax is in late-stage clinical testing. The drug is designed to work by stimulating the body's immune system so that it can identify and destroy cancer cells.

Merck said that interim results showed that studies involving the drug should not be stopped early and should continue to a final analysis. Merck is a German drug and chemicals company that is separate from U.S.-based Merck & Co., Inc.

Oncothyreon stock lost $3.34, or 39.7 percent, to close at $5.07, as the broader markets slumped.

The fact that the trial is continuing is good news, but without any comment from Oncothyreon, analysts are having a hard time interpreting the interim results, said WBB Securities President Steve Brozak.

Brozak has a "Sell" rating on the company and said he isn't comfortable with the company's relationship with Merck.

Oncothyreon is a development-stage company with no products on the market. It specializes in cancer treatments, and Stimuvax is its star player.

"The fate of the company isn't in the company's hands it's in (Merck KGaA's) hands," Brozak said.

JMP Securities analyst Charles Duncan maintained a "Buy" rating on the stock. Duncan said he did not expect the trial to be stopped early and said the stock is trading at a good price for patient investors.

Also on Tuesday Oncothyreon reported widening losses for the fourth quarter. They amounted to $11.5 million, or 27 cents per share, compared with losses of $6.1 million, or 20 cents per share, in the final quarter of 2010. It reported no revenue for the quarter that ended Dec. 31.

Source: http://news.yahoo.com/oncothyreon-shares-tumble-cancer-drug-delay-211421038.html

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