This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Adventrx: FDA Rejects Lung Cancer Drug

SAN DIEGO (TheStreet) -- The market value of Adventrx Pharmaceuticals (ANX) will plunge Wednesday (and deservedly so) after U.S. regulators rejected the company's lung cancer drug Exelbine.

The setback raises serious and legitimate questions about Adventrx's qualifications as a drug developer and should pop the speculative trading bubble that's over-inflated the company's valuation all summer.

Adventrx shares closed Tuesday at $2.54 ahead the announcement of the Exelbine rejection. The company isn't worth more than the cash on its books -- $40 million, or about $1.11 a share. For its sheer stupidity and the fact that Adventrx still intends to spend (waste) its cash, the stock should trade below cash value.

That's because Adventrx appears to lack any ability to get even the simplest of drugs approved by the U.S. Food and Drug Administration. Exelbine is a proprietary reformulation of the chemotherapy drug vinorelbine -- nothing fancy or complicated about it. The only requirement to get Exelbine approved was to show in a very straightforward and small study that Exelbine was biologically equivalent to vinorelbine.

Yet somehow, Adventrx managed to screw up this simple task. Unbelievable.

Based on inspections of clinical trial sites, FDA reviewers were unable to verify the "authenticity" of the drugs used in the bioequivalence study, which put the results of the study in question, according to Adventrx's explanation of the FDA rejection letter.

Step back a moment and think about what that means: FDA is accusing Adventrx of running a clinical study so mismanaged that determining which lung cancer patients received either Exelbine or vinorelbine could not be determined.

Doh!

If that's not enough, FDA still has unanswered questions about the quality and manufacturing of Exelbine, according to Adventrx. Yet these were concerns that Adventrx was supposed to have assuaged after FDA issued refuse-to-file letter for Exelbine in March 2010.

In July, I argued that Adventrx -- trading near $4 a share at the time -- was wildly over-valued based on the tiny commercial opportunity for Exelbine. I assumed Adventrx would manage to get Exelbine approved, even though the drug would barely generate any revenue. I was right about the stock for the wrong reasons. I gave Adventrx too much credit. I didn't believe the company could be as incompetent as it's now proven to be.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs