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CAMBRIDGE, Mass. (TheStreet) -- The heady days when a biotech company cancelling investor meetings was interpreted as a very good thing -- perhaps a sign of a takeover in the works -- appear to be over.

Zafgen (ZFGN) - Get Zafgen, Inc. Report shares sank 35% to $22.15 Monday after the company cancelled a non-deal roadshow set for Tuesday organized by the investment bank RBC Capital, according to Bloomberg. Zafgen also cancelled an investor dinner for Wednesday with host Maxim Group.

Investors are assuming the meetings were called off because something has possibly gone wrong with Zafgen's lead drug, beloranib. A phase III study of beloranib is underway with initial results expected in the first quarter of next year. Beloranib is an obesity drug which works by altering the way the body metabolizes fat. The initial phase III study is targeted at patients with Prader-Willi Syndrome, a rare disorder which causes life-threatening overeating.

There might be nothing at all wrong with the beloranib study, but Zafgen's public silence Monday, apart from notifying its investment-banking hosts about the cancelled meetings, is fueling investor concerns.

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Zafgen did not respond to emails seeking comment.

The abrupt cancellation of investor meetings used to be interpreted more positively just three or four months ago when biotech stocks were soaring on endless investor optimism. That investors are now assuming the worst about Zafgen exemplifies the market's psychological downshift as biotech and drug stocks sink. The surprise blowup of Eli Lilly's (LLY) - Get Eli Lilly and Company (LLY) Report cholesterol pill earlier Monday isn't helping investors feel any better about the sector, either.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.