Maxim Heading Toward Minimum After FDA Panel Rout

Maxim Pharmaceuticals(MAXM Quote) was sent packing by a Food and Drug Administration panel Wednesday in a debacle its shareholders won't soon forget.

The San Diego biotech company sought approval for its drug Maxamine to be used for treating advanced skin cancer that has spread to the liver. But the FDA's Oncology Drugs Advisory Committee decided in rejecting the application that tests of the drug were flawed. Meanwhile, an analyst who was bullish on the stock until after yesterday's plunge now says Maxamine's not likely to be approved for any cancer indication, a concession that could pressure the stock even further.

Shares of Maxim plunged 22% Wednesday, hitting $13.12, before a midday trading halt ahead of the committee's decision. The stock had plummeted 44% Tuesday after a posting on the FDA's Web site suggested the committee's decision would be negative.

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