MedImmune Inc. of Gaithersburg saw its shares pummeled yesterday as the fledgling biotechnology company disclosed that its breakthrough drug had mixed results in its final stage of clinical trials.
The stock dropped $2.75, or 23 percent, to $9.25 in extremely heavy trading after the company said its key drug worked on one set of patients but not another.
RespiGam, designed to prevent a virus that causes infant pneumonia, significantly reduced hospitalization related to respiratory syncitial virus in premature infants and infants with a condition called bronchopulmonary dysplasia.
But it did not significantly reduce RSV in infant patients with cardiac problems, another targeted group.
"One study worked and one study didn't," said A. Paul Boni, a biotech analyst for Mehta & Isaly in New York. "MedImmune isn't giving out a lot of details. There's no reason why one study should work and the other one shouldn't."
Mark Kaufman, MedImmune investor relations director, said the successful trial covered infants who make up 90 percent of the market for RespiGam, and attempted to downplay the lack of success in the cardiac patients.
"While we're disappointed, we believe the overall results were positive," he said.
The sharp drop reflected concern that the drug's mixed results could hurt its pending application to gain final marketing approval from the U.S. Food and Drug Administration.
Mr. Boni said MedImmune's stock is especially sensitive to bad trial results -- and to the vaguely worded press release MedImmune issued to disclose yesterday's mixed bag -- because Wall Street has been burned by the company before.
In 1993, the company sought FDA approval for RespiGam based on an earlier study, but an FDA review panel refused to approve the drug because of flaws in the research, setting off a big stock drop and sparking a lawsuit by angry shareholders.
"The company has a credibility problem from 1993, and what they did today doesn't help," Mr. Boni said. "The press release doesn't read so clearly, and I think that's part of the problem."
RespiGam is by far the company's most promising drug in the short term. As with nearly all early-stage biotech companies, MedImmune has lost money since being founded in 1988, but Morgan Stanley & Co. has predicted that MedImmune would turn profitable by 1997 or 1998 based on RespiGam sales the brokerage firm estimated would reach $82 million annually.
"Without this drug the company doesn't have a very clear future," Mr. Boni said.