(Biotech winners and losers item updated for closing stock prices.)
NEW YORK (
had the most unfortunate story in the biotech library Monday, as investors stripped more than half the market cap from the company's stock after the Food and Drug Administration
denied approval of Alexza's treatment
for schizophrenia and bipolar disorder.
Called AZ-004 and co-marketed with
, the treatment takes a generic drug called loxapine and delivers it to patients through an inhaler.
The FDA, however, said it had safety concerns about how the inhaled doses affected the lungs. Some patients in Phase 1 trials exhibited decreased pulmonary function, the FDA said.
In frantic trading Monday, Alexza shares ended the session at $1.38, down $1.65, or 54.4%. Volume exceeded 16 million shares, more than 20 times the daily average turnover in the name.
Elsewhere in the biotech sector, stocks were trading mixed. The Nasdaq Biotechnology Index declined 2.35 points to 908.39.
Among notable gainers,
shares rose 6.4% to $5.67 on heavy volume after the company announced it had launched a Phase 1 human clinical trial of a stem-cell-based treatment for spinal cord injuries.
The study is seminal -- and not just for the controversial Geron. The study marks the first time that stem cells removed from a human embryo will be tested in a human being. Geron's hope is that the cells will fix spinal nerve damage soon after injuries occur, thereby avoiding permanent paralysis.
The Geron trial comes after political skirmishing at the highest levels. Former President George W. Bush had famously placed restrictions on the use of federal funds for stem-cell research -- restrictions lifted by President Obama and upheld by a U.S. appeals court in September. Development of the Geron drug has partly been funded by a handful of states that rebelled against Bush's restrictions and offered grants on their own.
Among other winners in the land of experimental medicines,
saw its shares rise steeply Monday after the European Union approved the company's pain reliever Vimovo for sale on the Continent.
is Pozen's partner in the development of the drug, which combines naproxen with the British pharma giant's heartburn blockbuster Nexium.
Pozen shares closed the session at $7.29, up 7.5%.
Good news in the regulatory arena helped other stocks as well.
, the Irish drug company, received the FDA OK for its osteoporosis treatment Atelvia, acquired from
Procter & Gamble
in 2009, along with a suite of other related drugs.
Warner expects to begin selling the Atelvia tablets in the first part of 2011.
The stock finished at $23.88 Monday, up 7.2% on volume of 6.6 million shares, more than triple the daily average.
No biotech decliners could come close to matching the doozy of Alexza's collapse Monday, though several lightly traded small-caps in the sector retreated sharply in busy trading.
, a San Diego-based firm trying to develop antibiotics to treat stomach viruses, fell 5.5% to $9.33 on no apparent stock-moving news.
An article on
noted that the company, led by an ex-Pfizer executive named Pedro Lichtinger, is among a small group of biotech shops attempting to develop antibiotics that will kill bacteria increasingly resistant to standard drugs.
Elsewhere, shares of
Obagi Medial Products
, a developer of skin-care products, were retreating nearly 6% on brisker-than-average volume Monday after the firm said its CEO, Steve Carlson, was resigning.
No reason was given, and the uncertainty appears to have spooked the market.
Until the company finds a new chief executive, it will hand the reins to Al Hummel, currently the CEO of Chicago biotech
. Hummel has been an Obagi director since 2005.
Obagi shares closed at $10.50, down 5.9%, on volume of about 196,000 shares. Average daily turnover is 74,000.
-- Written by Scott Eden in New York
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