The Five Dumbest Things on Wall Street This Week: June 29

5. Ventrus Gets Flushed

The 60% drop in shares Ventrus Biosciences ( VTUS) on Monday is certainly agonizing for the company's investors but for one Wall Street analyst, it's a huge pain in the ass.

Shares of the biotech plummeted to $5 from $12 on the news that its experimental hemorrhoid drug, titled VEN 309, flunked a costly late-stage trial. According to Ventrus, which went public in December 2010, the highly touted drug failed to adequately stop anal bleeding in its test subjects and therefore the company plans to stop the fiscal bleeding by halting its development.

Now that VEN 309 is history, Ventrus plans to allocate its remaining $31.1 million in cash toward the completion of its drug for anal fissures, named VEN 307, and fecal incontinence.

(Look, we're sorry, but this is what we do. It's what adolescents, frat boys and the Farrelly Brothers do too, but still we have no choice!)

Anyway, of all the analysts who follow the stock, it was Brean Murray Carret analyst Jonathan Aschoff (Oh man! Aschoff!?! Lord, please forgive us) who got totally caught with his pants down. Not even two weeks ago, Aschoff initiated coverage of Ventrus with a glowing buy rating and a $30 price target based on his belief that VEN 309 would pass FDA muster and then go on to generate about $1 billion in annual sales at its "peak market penetration."

Sadly, because of the drug's demise, Ventrus investors can forget about that particular penetration. And, as you may have guessed, Aschoff was forced to flush that particular outlook down the you-know-where Monday, lowering his target to $11 soon after the stock hit the fan.

Nevertheless, despite all that's happened, Aschoff is still not giving up hope that someday the shares will indeed turn into shinola. He reiterated his buy rating and told investors to "buy the dip" because he believes VEN 307 has the ability to pick up where VEN 309 left off.

Oh man. We sure do hope his latest call pays off, because right now it doesn't look like he knows his VEN 309 from his elbow.

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