ALPHARETTA, Ga. ( TheStreet) -- Shares of hepatitis C drug developer Inhibitex (INHX) whipsawed Wednesday on a mash of rumors, analyst chatter and speculation all tied to the safety of the company's lead drug INX-189.
With an important safety check on INX-189 expected this month or next, investors are clearly twitchy nervous -- more so since Pharmasset (VRUS) shut down clinical work on a similar hepatitis C drug last month due to liver toxicity.
Inhibitex shares lost as much as 16% of their value Wednesday on no apparent news, which naturally sent investor searching for an explanation. This is on top of an 8% drop in the stock on Tuesday.
At first, the Inhibitex weakness was attributed to the rival Achillion Pharmaceuticals (ACHN) receiving FDA fast-track status for its hepatitis C drug. This explanation was quickly discarded for its utter stupidity.Inhibitex, speaking through multiple sell-side analysts defending the stock, said nothing materially had changed with the INX-189 study. The stock began to recover. Most likely, Inhibitex sold off because of cautious and unpublished comments made by Bank of America/Merrill Lynch biotech analyst Rachel McMinn to her investor clients during a series of marketing meetings this week. McMinn is the axe on hepatitis C drug stocks so her comments carry a lot of weight. Speaking about the upcoming data on INX-189, McMinn reportedly told her Wall Street clients that while the risk-reward in Inhibitex shares is still positive, the stock has dramatic downside if safety issues crop up. "Preclinical toxicity