) --Nothing blows up like a biotech or drug stock. When things go wrong -- a failed clinical trial, an FDA rejection -- investors bail and stocks implode. It's the dark underbelly of a high-risk, high-return sector. Here are the five worst-performing drug stocks this year.

No. 5: Vermillion

What goes up, must come down. That's certainly true for


(VRML) - Get Report

and its stock price, which rocketed 30-fold following FDA approval of an ovarian cancer diagnostic test in Fall 2009. Selling the ovarian cancer test in 2010, however, has proven significantly more challenging, which is why Vermillion's stock is now firmly back on earth.

The stock: Vermillion shares are down 83% this year as sales of the OVA1 test continue to disappoint.

No. 4: Oxigene



has always been a bit of a biotech orphan, generally unloved and always short of cash and interest. This year was no different with investors generally looking unfavorably upon an abrupt CEO change and Oxigene's lead cancer drug after the presentation of mid-stage study results in June.

The stock: Oxigene's shares remained relatively flat into the spring but then took a big dip down through the summer months and are now down 82% on the year.

No. 3: Angiotech Pharmaceuticals


( ANPI) woes began as its drug-coated heart stent business lost market share to rivals and got worse as choking debt threatened bankruptcy. The company is now trying to recapitalize its balance sheet and cut debt.

The stock: The debt troubles pushed Angiotech shares down 82% this year.

No. 2: Marshall Edwards

Marshall Edwards

( MSHL) sank after the company's lead ovarian cancer drug failed a phase III study. Making matters worse, Marshall Edwards is majority owned by a troubled Australian drug company and was fighting to maintain a Nasdaq listing despite a hefty reverse stock split.

The stock: Marshall Edwards' shares are down 88% this year, and their volume has all but dried up.

No. 1 ARYx Therapeutics



has a stable of drugs that partners or prospective buyers don't want. The company's efforts to sell its drug assets this year failed, forcing Aryx to essentially shutter operations and seek emergency loans to keep the lights on.

The stock: Prospective buyers of Aryx's drugs aren't interested, and neither are investors. Aryx's shares are down 89% this year.

Check back tomorrow for the winners of 2010.

--Written by Adam Feuerstein in Boston.

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5 Drug Stock Losers of 2010

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Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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