Celgene, Sepracor and Guidant Have Bad News

Updated from 9:10 a.m. EST

Two drug companies and a medical device maker reported product setbacks Thursday morning, sending their shares into a tailspin. Sepracor(SEPR Quote) and Celgene(CELG Quote) both had drugs run into trouble with the FDA, while Guidant(GDT Quote) halted trials of an artery stent after a study found it wasn't effective.

Sepracor nosedived 55% to 21.03 while Celgene lost 15% to $23.59 and Guidant shed 7.4% to $37.50.

The FDA told Sepracor it planned to issue a "non-approvable" letter for its Soltara antihistamine, saying the new drug application covering it contained insufficient data. The company said it had expected the drug to account for a "significant" portion of 2002 revenue, but now believes it won't be commercialized for at least a year.

Meanwhile, Celgene said an application to market its Thalomid to cancer patients would be delayed while it conducts another clinical trial. Celgene said discussions with the FDA suggested that an additional clinical trial would be needed before it sought marketing approval for a bone cancer called multiple myeloma.

And Guidant said a study showed a stent system coated with the compound actinomycin-D to help open clogged arteries wasn't effective. "Preliminary results of the study indicate that actinomycin-D is not effective in preventing restenosis," or reclogging of the arteries, Guidant said in a release. Patients treated with the stent also often needed another procedure to reopen the clogged artery.

On a more positive note, Genzyme General(GENZ Quote) rose slightly after reporting an increase in fourth-quarter profits and Cubist Pharmaceuticals(CBST Quote) surged 20% after saying it plans to ask U.S. regulators to approve an experimental drug for complicated skin and soft tissue infections.