5 Biggest Drug-Stock Losers of 2011

BOSTON (TheStreet) -- FDA rejections, clinical-trial blowups -- nothing spells "fail" like a drug stock gone bust.

Investors who love biotech and drugs stocks for their miraculous ability to double or triple in value are also at risk of getting stuck in nightmares like these: The five worst-performing drug stocks of 2011. Here they are:

No. 5: Alimera Sciences ( ALIM)

See that steep, scary cliff in Alimera's stock chart in November? That's what happens when the U.S. Food and Drug Administration rejects your only drug. The FDA didn't just reject Alimera's Iluvien, regulators ran over the diabetic macular edema drug with their car, then backed up and ran over the drug again just to make sure it would never, ever get back up.

Brutal.

The stock: Investors left Alimera for dead because the company doesn't have the resources to resurrect Iluvien, and even if it did, the FDA's rejection was so harsh that it almost eliminated the possibility of approval -- ever. Alimera shares are down 88% this year, trading at cash.

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No. 4: Aoxing Pharmaceuticals ( AXN)

I have a confession to make: I know nothing about Aoxing Pharmaceuticals. While researching this story, I tried to find something that would explain why the Chinese drug maker performed so poorly this year. My best guess is that U.S. investors have no interest in owning a money-losing drug company that operates halfway around the world. This year's implosion of so many Chinese reverse-merger stocks probably didn't help Aoxing much either.

The stock: Aoxing is down 91% this year.

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No. 3: Marina Biotech ( MRNA)

It's bad enough that Marina focuses its R&D efforts on RNAi drugs, an unproven field that has been largely abandoned by everyone else. Worse, Marina's drugs are still in the preclinical and early, early stages of clinical testing. What Marina did well in 2011 was raise money but even with that accomplished, the company's balance sheet is still cash-poor.

The stock: Say "RNAi" to an investor, and he'll either laugh or run away screaming. Marina shares have lost 92% of their value this year.

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No. 2: StemCells ( STEM)

What's scarier than pitching an RNAi stock to an investor? Pitching an embryonic stem cell stock! Geron had the good sense to abandon its embryonic stem cell therapy program. StemCells perseveres for reasons unknown.

The stock: StemCells began and ended 2011 the same way -- by raising money. In between, the stock lost 93% of its value.

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No. 1: Radient Pharmaceuticals ( RXPC)

The winner by a mile. When I compiled this list of drug-stock losers, I excluded pink-sheet and bulletin-board issues, but Radient was granted an exemption since the stock sank to the OTC in June.

In 2011, who could forget Radient's business deals with a dead Indian prime minister or pseudo-partnership with the Mayo Clinic?

Then there was Radient's massive loan default, the reluctant disclosure that its India joint venture was a bust and the delisting from Amex.

The stock: It's not possible to lose more than 100% but Radient came close with the shares plunging 99.6% in 2011.

>>To see these stocks in action, visit the 5 Biggest Drug-Stock Losers of 2011 portfolio on Stockpickr.

--Written by Adam Feuerstein in Boston.

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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.

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