Updated from 2:31 p.m. EDT

Is there life left in Progenics ( PGNX)?

I must be a masochist. Why else would I be writing another column about the Tarrytown, N.Y., drugmaker, especially after the March 12 announcement of a failed phase III study for the company's bowel drug in surgery patients?

At its current price around $5.85 -- down 57% from the day before news of the disappointing trial -- Progenics is trading near its value in cash. That means investors think bupkis of the bowel drug methylnaltrexone, let alone anything else the company has cooking in its pipeline.

The market may be right. Methylnaltrexone, or MNTX, might be dead and buried. But what if the drug has a pulse and no one is noticing? If that's the case, the stock is priced to buy right now.

The ongoing saga of Progenics will become much clearer on April 30. That's when the U.S. Food and Drug Administration is expected to hand down its approval decision on the subcutaneous form of MNTX for the treatment of opioid-induced constipation in patients with acute medical illness, or AMI. This is a different indication than the failed phase III studies.

AMI is a catch-all term but generally refers to hospice-care patients who are nearing the end of their lives. These patients are typically offered palliative care that includes large doses of narcotics, which can cause severe constipation. Progenics is seeking FDA approval for a form of MNTX, injected under the skin, that relieves the painful constipation and bloating.

Progenics ran two phase III, placebo-controlled studies of MNTX in patients with AMI; both met their primary endpoints of laxation, or bowel movements, within four hours of treatment.

In the first study, for instance, 154 constipated patients with advanced medical illness were randomized to receive one of two doses of MNTX or a placebo. Four hours after dosing, 63% and 64% of the MNTX patients had a bowel movement, compared to 34% of placebo patients. The results were statistically significant and there were no serious safety issues associated with MNTX reported.

SummerStreet Research Partners, an independent health care research outfit, issued a note to clients March 20 predicting an FDA approval for MNTX in patients with AMI. If MNTX were approved, Progenics shares would be worth $10, the firm stated.

"The FDA likely will approve subcutaneous methylnaltrexone by April 30 for the treatment of opioid-induced constipation in patients with advanced medical illness. Two Phase III studies reached their endpoints -- percent of patients who defecated within 4 hours of receiving drug. No significant safety issues have appeared," wrote SummerStreet analyst Carol Werther.

She adds, "The biggest risk to a quick approval is that the FDA may require an additional 12 month safety study. The concern is that the drug may cause cardiac adverse events and tumors similar to Adolor's ( ADLR) Entereg."

The MNTX study that failed earlier this month involved an intravenous form of the drug used to treat patients coming out of abdominal surgery. The study, conducted by Progenics' partner Wyeth ( WYE), failed to demonstrate that MNTX was better than placebo in helping patients return to normal gastrointestinal function.

A second phase III study, in the same type of patient, is underway, with results expected later this year.

Werther doesn't expect the negative results from the failed phase III trial to hurt Progenics' chances for getting MNTX approved in patients with AMI, since the indication is for a different form of MNTX in a different patient population.

That's the sunny side of the Progenics story; there is a darker version of upcoming events as well.

Citibank biotech analyst Yaron Werber downgraded Progenics to a hold from a buy on Jan. 10 after the company announced that the FDA pushed back its review of MNTX for patients with AMI by three months.

Progenics disclosed at that time that regulators wanted more time to review additional safety data on MNTX related to potential for the drug to cause QT prolongation, a potentially serious irregular heartbeat. Progenics said it handed new safety data to the FDA that demonstrated "no evidence" of QT prolongation.

Werber was also concerned that the results of Phase III study of intravenous MNTX seemed to be delayed. Ultimately, his call was a good one, since the stock was trading at around $17 right before the downgrade.

When Progenics announced the negative trial result on March 12, the Citi analyst doubled down, downgrading the stock to a sell with a $5 price target. He doesn't believe that MNTX will be approved for AMI, saying that the two studies for that use were too short and had too thin a data set.

Progenics considers AMI to be an acute use for MNTX, which means that patients, given the advanced nature of their disease, won't be on the drug very long. That is why the studies conducted were relatively short.

But as Werber and other Progenics critics argue, the FDA is very safety conscious and may be concerned about a lack of long-term safety data for MNTX. If that's true, the agency may require Progenics to complete a 12-month safety study before approving the drug.

Know What You Own: PGNX operates in the pharmaceutical sector of the healthcare industry, and some of the other stocks in its field include Eli Lilly ( LLY), Novartis ( NVS) and Pfizer ( PFE). These stocks were recently trading at ($50.09, -0.16%), ($49.92, -0.78%) and ($20.61, -0.82%), respectively. For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

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

More from Stocks

A Hungry Grizzly Bear Is Stalking the Stock Market

A Hungry Grizzly Bear Is Stalking the Stock Market

Tesla Has Lost 15% Since Musk's Take-Private Tweet

Tesla Has Lost 15% Since Musk's Take-Private Tweet

Why Most Americans Like a Volatile Stock Market: Study

Why Most Americans Like a Volatile Stock Market: Study

Should Retirees Invest in the Tech Sector?

Should Retirees Invest in the Tech Sector?

Here's How to Trade Walmart, Nordstrom, Macy's and J.C. Penney After Earnings

Here's How to Trade Walmart, Nordstrom, Macy's and J.C. Penney After Earnings